EMV Chip Adoption Will Push Scammers Into Other Types of Credit Fraud
NEWS ANALYSIS: Chip and PIN credit cards using the EMV chip will bolster point of sale security, but other types of online fraud will likely become more prevalent. Here's what to look for.With all of the discussion about credit card fraud, and how cards with EMV chips might have prevented much of the Target credit card breach, it's easy to assume that those chips solve all credit card fraud. But they aren't a panacea. In fact, more secure credit cards could mean an increase in other types of credit fraud. Experience in Canada, the U.K. and Europe has shown that once EMV-equipped cards that require PINs are widespread in an area, certain types of credit card fraud drop dramatically. Everything depends on who is holding the card when a transaction is attempted. In situations where the credit card is physically present, such as when you're using the actual card in a transaction where there's a card reader, then the chip and PIN system virtually eliminates the use of lost, stolen or counterfeit credit cards.
Because of the way the embedded microprocessor in the credit card works, creating a fake card is impossible. And using a lost or stolen card means you have to also know the PIN.