EMV migration merely displaces fraud
Thus fraud has to move either to neighboring countries or to alternate card usages such as card not present transactions.
As the UK introduced Chip and Pin technology last year, its local card fraud dropped dramatically. And as compensation, fraud aboard reached GBP 118 million (EUR 173 million) in 2006, a 43% increase compared to 2005 figure. Also, card-not-present (case of telephone, internet and mail order card transactions) fraud rose 16% reaching GBP 213 million (EUR 313 million). On the other hand, fraud in face-to-face transactions fell by 47% to GBP 72 million (EUR 106 million) demonstrating the efficiency of the EMV migration.
In America, Canada plans to complete its EMV migration by 2010, and Mexico, which started its EMV migration as early as 2002, expects to reach a 100% smart card transition by next year. Of course, the US payment community is considering the risk of fraudsters moving both from Mexico and from Canada, when the local systems sill be more secure thanks to smart cards. So far, in the US, no plans have been established for the EMV migration, as many operators are involved on contactless cards projects. The US has also been relying on their cost effective telecom infrastructure and on real-time authorization for 99.5% of the transactions. At the time being, fraud in the US is 5 cents per US$ 100 spent, said Patrick Gautier, Senior VP of new product development at Visa USA. However, if the world (and especially the two neighbors of the US) migrates to EMV, the country may appear as the primary target for fraudsters. The US payment market experiments with contactless cards and with contactless cards, but still seems to be reluctant to adopt EMV. But contactless may be a path leading to more security through dual interface cards.