EMV Chip Readers
If you haven’t already, work toward implementing EMV chip readers into your property. EMV, which stands for Europay, Mastercard, and Visa, is a global standard for cards equipped with computer chip technology as well as the terminals used to authenticate chip card transactions.
EMV chip readers are better suited for preventing criminals from using “skimmers” to replicate cardholder data and create false credit cards. Skimmers can be installed easily over existing payment terminals and are used to collect information from the cards used in transactions. Criminals can then use the data to create fake credit cards.
And with advances in technology, many skimmers are now Bluetooth enabled and can transmit data without the need to physically extract the information from the device. To combat this, anyone who works with physical card readers must be trained on what to look for and how to detect a skimmer that’s been installed over the terminal.
Additionally, it’s easier to collect data from stripe cards than the more secure chip card – the magnetic stripe on cards holds all the information for the cardholder, including the PAN, name, address, and CVV, and is easily stolen by criminals using a skimmer.
How EMV chip cards and terminals help reduce fraud:
- Much harder to duplicate a chip card
- Minimizes the use of swipe for chip compatible cards (which would be fake)
- Minimizes the ability for thieves to use stolen cards in-store
While this should be more than enough incentive, as of 2018 less than half of hotels (42%) had yet to implement EMV terminals.
Beginning in 2015, there was a liability shift and merchants who haven’t switched to a chip card are now liable for fraudulent card use. Previously, the issuing bank was liable.
The shift has had a huge impact (as reported by Visa):
- Counterfeit fraud has dropped by 76% for merchants who completed the chip upgrade.
- Over 2.9 million merchants now accept chip cards, representing 63% of US storefronts.
- In March 2018, 97% of card-present Visa transactions involved EMV cards
However, this doesn’t prevent card-not-present (CNP) fraud. In fact, there has been an increase in CNP because criminals are shifting away from physical transactions due to EMV terminals, and because online systems have no way to tell if it’s a stripe or chip card.
Merchants like the check-out process to be as seamless as possible, often prioritizing this over data security. This is especially true of the hospitality industry where the guest experience is the highest priority. Many choose not to perform many or any validations at check-out and will take the risk of fraud over the risk of losing a guest.