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Chip & Pain: EMV Will Not Solve Payment Card Fraud

Switching to EMV cards will lower retail fraud, but it's not enough. Here's the good, the bad, and the ugly.

Home Depot, much like Target before it, has responded to its breach with a press release indicating that it will be rolling out Chip and PIN technology. While this is a positive step, it is also a bit of a red herring: Chip and PIN technology alone would have done little or nothing to prevent those breaches.

Chip and PIN is one piece of a larger standard called EMV (Europay, MasterCard, and Visa). This standard defines how chip cards interoperate with point-of-sale terminals and ATMs. It includes the Chip and PIN functionality that we hear so much about as well as Chip and Sign functionality that seems more likely to get rolled out in the US. EMV is not without its flaws.

It's all about the money
The card brands are pushing for EMV to be in place by October 2015 with gas pumps and ATMs allowed an extension until October 2017. The mechanism by which this is being accomplished is a liability shift.

In the US today the bank or card brand is typically responsible for most fraud losses. When the deadlines pass the acquirers will be transferring liability for fraud losses down to whoever isn't using EMV technology. For example, if fraud is committed with an EMV card at a merchant that only supports stripe cards then the merchant will be liable.

[Read the full story on Wall Street & Technology.]

Christopher Camejo is an integral part of the Consulting leadership team for NTT Com Security, one of the largest security consulting organizations in the world. He directs NTT Com Security's assessment services including ethical hacking and compliance assessments. Mr. Camejo ... View Full Bio

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Greg MacSweeney
Greg MacSweeney,
User Rank: Author
9/24/2014 | 10:00:34 AM
Yes, EMV will certainly help. The Target and Home Depot hacks would likely be non-events if most users had EMV chips. Or the events would be much smaller and limited to the few users who did not have EMV cards.
User Rank: Author
9/24/2014 | 9:28:11 AM
Good analysis. While EMV won't be a sure-all in preventing card fraud, it should still help on the current situation.
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