Quality Progress - May 2017 - 8

A digest of
trends, research
& late-breaking
news

TECH N O LOGY

False Sense
of Security?
Despite hiccups, chip cards reduce
in-store fraud, but online hacks persist
If you're like most U.S. consumers, you use your credit or debit card regularly-
possibly daily. At some point in the last two years, it's likely you were issued new
cards with chip technology. When you go to pay for items at a store, you now may be
required to insert your card into the chip reader, rather than swipe the magnetic strip
on the card's back.
That little chip is known as Europay, MasterCard, Visa (EMV) technology. EMV is the
global standard for credit and debit cards that use computer chips to authenticate
transactions.1 It's meant to make point-of-sale transactions more secure to prevent
identity and card fraud. Unlike the magnetic strip, the chip creates a unique transaction
code that can't be reused. 2
Of course, you may have dealt with some of the hiccups that come with chip card
adoption. First, retailer migration to the technology has been slow. Major credit card
companies gave retailers an Oct. 1, 2015, deadline to install chip card readers in their
point-of-sale terminals. After that date, if a counterfeit credit card was swiped in a store
that didn't have a chip card reader, the liability fell on the merchant. Previously, the
liability belonged to the credit card company. 3
By October 2016, just one-third of retailers had migrated to EMV point-of-sale readers.4 Some of this lag time was due to a slower testing and certification process: Every
EMV-enabled terminal must be certified by EMVCo, which manages the EMV specifications and the credit card brands the business accepts for payment. 5
Furthermore, faulty chips and chip readers, and slow processing times left many
customers frustrated by longer checkout lines and caused some retailers to resist the
move to a new chip-reading system.6
So, have the growing pains been worth it? Has EMV technology helped resolve card
and identity fraud in the United States?

8 QP

May 2017 ❘ qualityprogress.com

While chip card technology has helped
reduce fraudulent activity in stores, experts
say it may be giving consumers a false
sense of security because it has spawned a
new rise in online fraud.7 So much so that in
2016, online fraud rose 40%.8

Physical fraud made
more difficult?

The good news is that EMV technology
seems to help curb in-store, or card-present,
fraud. Chips are safer and encrypt information more securely than magnetic strips.
For retailers who upgraded to EMV card
readers, Visa reported a 47% decline in
card fraud in May 2016 when compared to
May 2015. According to MasterCard, merchants who had adopted EMV technology
or were close to implementing it experienced a 54% decline in counterfeit card
fraud in April 2016 compared to April 2015.9
Also, merchant adoption is beginning to
pick up. Researchers say that in the next
three to four years, 84% of merchants will
have made the migration.10 Even some


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Table of Contents for the Digital Edition of Quality Progress - May 2017

Seen and Heard
Expert Answers
Progress Report
Mr. Pareto Head
Field Notes
Mind the Gaps
Solid Footing
Are These the Same?
New Tricks for an Old Tool
Innovation Imperative
Experience More
Career Coach
Statistics Spotlight
Standard Issues
Marketplace
Footnotes
Back to Basics
Quality Progress - May 2017 - intro
Quality Progress - May 2017 - cover1
Quality Progress - May 2017 - cover2
Quality Progress - May 2017 - 1
Quality Progress - May 2017 - 2
Quality Progress - May 2017 - 3
Quality Progress - May 2017 - 4
Quality Progress - May 2017 - 5
Quality Progress - May 2017 - Seen and Heard
Quality Progress - May 2017 - Expert Answers
Quality Progress - May 2017 - Progress Report
Quality Progress - May 2017 - Mr. Pareto Head
Quality Progress - May 2017 - 10
Quality Progress - May 2017 - 11
Quality Progress - May 2017 - Field Notes
Quality Progress - May 2017 - 13
Quality Progress - May 2017 - 14
Quality Progress - May 2017 - 15
Quality Progress - May 2017 - Mind the Gaps
Quality Progress - May 2017 - 17
Quality Progress - May 2017 - 18
Quality Progress - May 2017 - 19
Quality Progress - May 2017 - 20
Quality Progress - May 2017 - 21
Quality Progress - May 2017 - 22
Quality Progress - May 2017 - 23
Quality Progress - May 2017 - Solid Footing
Quality Progress - May 2017 - 25
Quality Progress - May 2017 - 26
Quality Progress - May 2017 - 27
Quality Progress - May 2017 - 28
Quality Progress - May 2017 - 29
Quality Progress - May 2017 - Are These the Same?
Quality Progress - May 2017 - 31
Quality Progress - May 2017 - 32
Quality Progress - May 2017 - 33
Quality Progress - May 2017 - 34
Quality Progress - May 2017 - 35
Quality Progress - May 2017 - New Tricks for an Old Tool
Quality Progress - May 2017 - 37
Quality Progress - May 2017 - 38
Quality Progress - May 2017 - 39
Quality Progress - May 2017 - 40
Quality Progress - May 2017 - 41
Quality Progress - May 2017 - 42
Quality Progress - May 2017 - 43
Quality Progress - May 2017 - Innovation Imperative
Quality Progress - May 2017 - 45
Quality Progress - May 2017 - 46
Quality Progress - May 2017 - Career Coach
Quality Progress - May 2017 - 48
Quality Progress - May 2017 - 49
Quality Progress - May 2017 - Statistics Spotlight
Quality Progress - May 2017 - 51
Quality Progress - May 2017 - 52
Quality Progress - May 2017 - 53
Quality Progress - May 2017 - Standard Issues
Quality Progress - May 2017 - 55
Quality Progress - May 2017 - 56
Quality Progress - May 2017 - 57
Quality Progress - May 2017 - Marketplace
Quality Progress - May 2017 - 59
Quality Progress - May 2017 - Footnotes
Quality Progress - May 2017 - 61
Quality Progress - May 2017 - 62
Quality Progress - May 2017 - 63
Quality Progress - May 2017 - Back to Basics
Quality Progress - May 2017 - cover3
Quality Progress - May 2017 - cover4
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