MARKHAM, ON, March 16th, 2012 – Last week the Interac Association announced that EMV chip technology on debit cards is paying off. This announcement was supported by Canadian figures that indicate losses due to fraudsters “skimming” information off cards has declined by nearly 40 per cent in 2011 compared to 2010.
And they are not alone in their findings.
Mike Henry, Senior Vice-President and Head of Retail Payments, Deposits and Lending at Scotiabank, said that to the best of his knowledge EMV chip technology has not been compromised by fraud anywhere in the world.
However now that one avenue for Canadian electronic fraudsters has been blocked, they will certainly strive to find others. The most likely scenario according to experts is that they will migrate to the United States where few institutions have incorporated chip technology into their payment cards and ATMs that cannot read chips will automatically read the magnetic stripe instead.
“Once 100 per cent of Canadian cards and devices are chip-enabled the only opportunity for a criminal is perhaps to get that magnetic stripe and go south of the border” says Oliver Manahan, Vice President of Emerging Payments at MasterCard Worldwide.
Avivah Litan, vice-president and distinguished analyst at U.S.-based Gartner Inc., says she can definitely see such a scenario playing out.
“It was smart for Canada to move to a chip,” says Litan. “I’m sure they’ve lowered the fraud rates and they will continue to lower. So, what happens is the bad guys will take data and come to the U.S. more often.”
Even still, taking a Canadian card to a magnetic stripe-only terminal in the U.S. would raise eyebrows back home.
“The neural networks that the banks employ will focus very heavily on non-chip transactions, so it will be difficult going forward for criminals to do that.” says Manahan. “In fact, it will probably be easier for them to just pick up and move to Buffalo.”
However, before we begin to gloat, Litan reminds us that Canada won’t be able to wash its hands completely of card fraud; our criminals will simply gravitate towards other forms of it. “There will be more e-commerce fraud in Canada,” she predicts.
In the battle against fraud, intelligent and sophisticated solutions are required to mitigate losses and the related negative reputational impacts.
“Now is not the time to get complacent and let down on our fraud prevention strategies” says Paul Mighton, Vice-President of Channel Sales and Marketing at Everlink Payment Services Inc.
To combat the threats posed by fraud, Everlink has partnered with its parent company FIS to develop the Everlink Fraud Management Solution which, together with EMV chip protection, assists financial institutions to detect and combat debit card fraud.
This solution makes use of global consortium data and a highly specialized and experienced analytics team which monitors fraud behaviour patterns across North America and continuously adjusts the scoring model. This is coupled with an integrated call centre of more than 100 resources which stands at the ready to coordinate with financial institutions and law enforcement agencies to assist with minimizing losses and with apprehending the perpetrators of these thefts.
When it comes to defeating fraud in Canada and abroad, it is always comforting to know that there are solutions available from Everlink.
Everlink Payment Services Inc. based in Markham, ON, is a joint-venture company owned by FIS and Celero Solutions, and is fully compliant and EMV certified with the Interac, MasterCard and Visa associations. Everlink is a recognized leader in the dependable secure delivery of Electronic Transaction Processing services, EMV Chip, Managed ATM Services and Integrated Payment Solutions in the Canadian financial services marketplace. Everlink is the first in Canada to instantly issue a fully personalized, Interac and MasterCard certified EMV Chip card.
To learn more about the Everlink suite of integrated payment solutions, please contact one of our Business Development or Channel Sales & Marketing team members at 1-866-388-0076 or view our contact page.