Vantage Point sat down with John Winstel, product manager for OmniShield Suite, Vantiv’s enterprise fraud solution for financial institutions, to talk about how Vantiv is working to protect the cardholders of our financial institutions’ customers.
“Vantiv is dedicated to helping defend cardholders against fraud, and the OmniShield Fraud Solution is one way we do that. With the recent EMV liability shift, card authorizations have taken on additional complexity that our fraud experts are prepared to handle. By keeping a close eye on EMV card activities, and partnering with industry leaders in both the U.S. and overseas, we are staying ahead of the ever changing fraud landscape,” Winstel said.
Winstel added that among the billions of transactions processed by Vantiv, three top trends have been observed:
1. An increase in fraudulent activities triggered by the EMV liability shift
- By targeting countries before and after the liability shift, fraudsters tend to ramp up efforts to collect on easy to counterfeit magnetic stripe cards. Until EMV cards and EMV terminals are widely adopted, fraudsters will continue to exploit the weakest security point within each credit card transaction. The U.S. is one of the last countries to roll out EMV cards, and with an estimated 600 million magnetic stripe cards still in circulation,¹ this trend is likely to continue.
2. Decrease in card present payment fraud when EMV is used
- As predicted, when EMV chip cards are used on an EMV payment terminal, fraudulent activity decreases. EMV chip cards use a dynamic system of authentication at the point of sale, making the production of counterfeit cards with EMV chip technology much more difficult. As a result, merchants can safely conclude that an EMV chip card presented for payment in a point of sale transaction is authentic and not counterfeit, and card issuers should similarly experience smaller fraud losses.
3. Increase in card not present fraud
- As experienced in other countries where EMV technology has been adopted, when card present fraud activity decreases, card not present fraud has increased. This is mostly due to criminals looking for alternate avenues to commit credit card fraud. U.S. merchants lost an average of 1.32 percent of revenue to fraud in 2015, an increase of 94 percent compared with 2014, when the rate was 0.68 percent. Online sales fraud made up 55 percent of the cases merchants experienced in 2015, up 31 percent from the year prior.²
“Vantiv constantly optimizes its fraud system,” said Winstel, offering a few examples of how OmniShield is constantly updating to monitor for suspicious activity to help defend financial institutions’ cardholders against fraud.
- Validation of the Authorization Request Cryptogram (ARQC) with all online authorization requests. Validating the ARQC helps to ensure that the card is authentic and not a counterfeit.
- Monitoring the Application Transaction Counter (ATC), the counter that increases with each EMV transaction. A decrease or a large increase in this counter may indicate fraudulent activity on the card.
- Monitoring for transactions on EMV cards and terminals that fallback to magstripe
- Updating the Vantiv fraud model and fraud scoring techniques to include additional components that are associated with EMV transactions.
- Applying fraud strategies that are currently used for card present transactions to EMV card present transactions.
“These are just some of the ways that our systems provide a critical component to protecting financial institutions and their cardholders,” Winstel concluded.
- “8 FAQs about EMV credit cards”, http://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php, October 6, 2015.
- “New ‘chip’ credit card technology won’t prevent online fraud”, http://www.marketwatch.com/story/new-chip-credit-card-technology-wont-prevent-online-fraud-2015-10-01, October 1, 2015.