Last updated: 19 March 2014
Card fraud costs people in the European Union around €1.5 billion a year, according to European law enforcement agency, Europol. The criminal market is dominated by “well-structured and globally active organized crime groups (OCGs)” perpetrating illegal transactions.
This may understandably worry some of our European-based readers, yet the report also finds that “the majority of illegal face-to-face card transactions (skimming-related) affecting the European Union take place overseas, mainly in the United States.” The key problem here is the poor protection offered for card-based services. The answer is also detailed in the report: EMV.
EMV, or chipped payment cards, have long been used in Europe as a means of providing advanced security for card payments. Yet in the United States, EMV technology is only in its infancy, which is quite unbelievable. There have been numerous warning calls that this security gap was becoming a target for criminal gangs and it’s unacceptable that anyone should pay the price.
EMV is slowly but surely being adopted by the American payments industry, but it is long overdue. I’ve blogged about this issue extensively over the last year, as the U.S. woke up to the fact it was becoming a haven for fraudsters taking advantage of antiquated magnetic stripe technology. Europe and Canada in particular have been great exponents of secure EMV technology and issuers in the United States have committed to issuing EMV cards by 2015 or face taking on fraud liability.
Meanwhile, cloned credit cards are being created by the criminal underworld thanks to a rampant online market for stolen data. Most of the credit card numbers misused in the EU “come from data breaches in the U.S. and while investments by EU industry in EMV have helped, not all transactions are protected with it on an EU or worldwide level,” says Europol.
Europol revealed the problem of illegal transactions in the U.S. has been reported to them by all 27 EU member states. As Cynthia Merritt asserted back in November, it remains a serious problem and, although the industry is making headway, EMV has a long way to go in the USA. More than 20 platforms still require upgrades or replacements, while a fragmented regional network continues to delay debit migration to EMV.
The U.S. needs to up its game if it is to meet the 2015 deadline, but for U.S. citizens and its visitors, the promised land of EMV protection cannot come soon enough.