If the US Follows the Post EMV Shift Fraud Path of the Italy
Containing Card-not-Present Challenge
Italy gets good marks low amount of fraud on total credit card spending, coming in at a respectable 2% compared to around 7% in the UK and France. However, if the United States experiences the same growth in card-not-present fraud as Italy, we will be in for a collective sigh of disbelief. If the United States follows the post EMV fraud path of Italy then the US will see fraud peak around $93.82 Billion 2019, with a dip to around $88.7 Billion per year in 2022. By comparison, in 2015 the US had $3.5 Billion in card-not-present fraud. If we follow the path of Italy, we will jump to nearly $88.4 Billion in losses in just 3 years. This eye-popping number should give us pause to reflect on if we want to transfer that much cash to criminals? And if not, what do we do?
Luckily, there is good reason to believe these sorts of increases won’t happen in the United States. First, when the EMV standard was implemented in 2006, CNP fraud in Italy was low at only 2% of total fraud. This initial low percentage of CNP fraud coupled to the sudden and rapid growth of ecommerce created fertile ground for criminals who were being pushed out of other countries with stronger safe guards. In the United States, projections for fraud range as high as $10 Billion for CNP fraud in 2018, so if we were to reach the crazy CNP fraud growth of Italy after they adopted EMV Chip & Pin.
Are there any lessons or innovations the United States can borrow from Italy? Similar to Spain and France, Italy recently created the Computerized System for the Administrative Prevention of Fraud, which allows the real time sharing of data between card issuers and card accepting entities, so they can compare current purchases to a historical record of businesses and transactions that are suspicious and have been flagged for potential abuse.