What If The US Follows Post EMV Fraud Path of Russia
If the US Follows the Post EMV Fraud Path of Russia
Eye-Popping and Unlikely
If the United States were to follow the post EMV fraud path of Russia then in 2022, the US will have fraud totaling a whopping $91.48 Billion, most of the increase comes in the form of card-not-present fraud, with counterfeit cards a close second. This represents a 1000% increase in fraud over the next 6 years. To be sure there are many differences between the US and Russian market that may prevent the US from ever reaching this level of fraud. First, Russia instituted EMV cards while they were still a predominately cash driven nation. The Central Bank of Russia has released figures showing that in 2013 83% of card transactions involve cash withdrawals, with direct card payments for goods and services at just 17%.
The United States on the other hand has a very mature credit card market, with world leading fraud rates. Secondly, even though the Growth of Fraud is large, total numbers in Russia are still low, mainly due to effective fraud measures such as payment verification via mobile messages. Visa reports just 1/10th of the fraud losses in Russia when compared to the global average.
There has also been positive news for consumers in Russia’s laws governing liability for fraud. Traditionally, if Russian banks suspected customers were involved in fraud, it was up to the customer to go to court and prove their innocence. This was buttressed by a forty-day period banks had to investigate the fraud and create a case against the victim. This all changed in 2013 with a new law that requires banks to return stolen funds to victims within 24 hours.
As Russians continue to adopt electronic forms of payments, they should stay ahead of the problem and invest in the best-practice fraud prevention solutions and strategies. With implementations times averaging six to eight months, this is a problem that could get away from them very quickly. If they delay and fraud increases, it will almost certainly cost more than implementing best-in-class fraud prevention.