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EMV — What Does This Mean For Card Not Present Transactions? How Does This Affect Fraud? How Can Your Business Stay Protected?

EMV credit cards represent one of the safest payment options for in-store purchases. In order to initiate a transaction, the embedded security chip must be physically present. Completing a transaction either requires a signature (with Chip & Signature cards) or a personal identification number (with Chip & PIN EMVs).

However, these advanced security features only apply to "card present" transactions — i.e. those within brick-and-mortar retail environments. For "card not present" orders via telephone or Internet, EMVs are no safer than traditional swipe and sign credit cards.

This partially explains why online credit card fraud is on the rise. As U.S. merchants adopt EMV security within their physical retail stores, thieves are increasingly flocking to e-commerce environments in greater numbers.  In fact, from 2014 to 2018, experts predict that online credit card fraud could double to $6.4 billion. Similar numbers likely exist for phone-based ordering and other "card not present" purchases.

As an Online Merchant, How Can You Make EMV Shopping Secure?

Although EMVs offer little protection in the e-commerce world, there are common sense strategies you can use to keep your customers' financial data safe from prying eyes. Some of the more effective tactics include:

  • Using a highly secure PCI-compliant payment gateway. This represents the first — and most important — line of defense.  With the right payment gateway, it's possible to dramatically reduce fraud overnight.
  • Asking for additional payment details (i.e. billing addresses, CVV codes).  Note that asking for more information may hurt conversion rates. You'll have to weigh the pros and cons of this approach and decide which is more expensive — fewer sales or more fraudulent claims?
  • Incorporating advanced security features like tokenization and point-to-point encryption. The benefit of these two approaches is that they don't disrupt the shopping experience for the user. All of the magic happens behind the scenes.
  • Using hosted payment pages. The payment processor stores all of the credit card data, thus, reducing your PCI scope. With the right hosted payment solutions, you can customize the checkout cart to look and feel exactly like your own site.
  • Taking advantage of fraud management tools that provide extra layers of security. Some of these tools prevent fraudsters from testing cards on your account or block transactions from specific countries that raise red flags.

One of the Best Ways to Make Online Shopping Secure

Using any combination of the above strategies can help you reduce fraud within your business. However, hackers and thieves continue to develop more inventive ways of stealing sensitive information. Even after you establish a PCI-compliant payment environment, it is imperative that you remain abreast of the latest security threats. Learn the newest best practices and understand the most current warning signs of fraudulent activity. Only then can you take the necessary steps to stay ahead of the curve.

To learn how BluePay can help, contact our payment security team today for a free consultation.

Topics: EMV, PCI Compliance and Fraud Prevention

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