U.K. chip & PIN technology may be accelerating attempted card fraud online
The United Kingdom’s introduction of microchip-bearing credit cards in January, an effort to prevent fraudulent card use at the point of sale, may be having an unintended effect: it may be migrating fraud attempts to the online environment.
Data from card and payments processing provider Retail Decisions showed that attempted fraudulent card-not-present transactions on the Internet in July were up 70% over the same period last year. That’s an increase form data gathered by Retail Decisions in January, shortly after chip & PIN technology debuted in the U.K., which showed that attempted Internet fraud had increased by 22% since the new card technology was introduced. Overall transaction volume on the internet rose 25% over last July, survey results showed.
The technology required holders of the micro chipped cards to enter a PIN number in a smart card reader at the point of sale. Unlike the information contained in a conventional credit card`s magnetic stripe, relatively easily copied by so-called “skimming” technology, the data in card chips is tamper-proof, making forgery or duplication more difficult. Even so, according to data from Retail Decisions, about a third of Britons don’t believe the new cards will end fraudulent card use.
“The 32% of people who believe Chip & PIN won`t stop card fraud are essentially right,” says Carl Clump, Retail Decisions CEO. “Our figures show that fraud is migrating toward CNP transactions where fraudsters can by-pass the need for a PIN number.”
Back...
