In most other countries, card-present fraud has been virtually eliminated by the widespread implementation of EMV; as a result, that fraud has moved to the U.S., where magnetic stripe technology prevails. Adopting EMV will require operational changes for the Issuer, the Merchant, the Processor and the Acquirer. Here are a few of the things everyone in the industry should understand about implementing EMV:
Why is the mag-stripe technology more susceptible to fraud?
Magnetic stripe data is static – the same information is sent on every transaction. Because magnetic stripe cards have no reliable means of authentication, cardholder authentication is limited to:
- signature comparison, which is notoriously subjective and inaccurate, or
- ZIP code verification (in some cases), which will not necessarily cause a transaction to decline because it is not specific to an individual cardholder.