Menu

Behind the scenes with OmniShield® Suite

How the solution is defending financial institutions’ cardholders

Vantage Point sat down with John Winstel, senior product manager for OmniShield, Worldpay’s enterprise fraud solution for financial institutions, to talk about how Worldpay is working to protect the cardholders of our financial institutions’ customers.

“Worldpay is dedicated to helping defend cardholders against fraud, and the OmniShield suite of products is one way we do that. By 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 Worldpay, three top trends have been observed:

1. An increase in fraudulent activities triggered by the EMV liability shift 

  • When card present fraud activity decreases, card not present (CNP) fraud has increased. This is mostly due to criminals looking for alternate avenues to commit credit card fraud. According to Lexis Nexis, in 2017 every dollar of fraud cost merchants $2.77, up from $2.40 a year ago. For example, the average share of revenue any business lost to fraud in over the last year rose to 1.9%. That translates to a shocking 279% increase compared to 2014, the year before the EMV liability shift took effect.1

2. Decrease in card present payment fraud when EMV is used

  • Counterfeit fraud rates have already decreased in the U.S. as a result of EMV adoption, according to Mastercard and Visa. Once EMV cards and EMV terminals are fully adopted, fraudsters will no longer be able to exploit the weakest security point within each credit card transaction (the magnetic stripe). For all U.S. credit cards, CPI Card Group estimates approximately 85 percent of cards now have chips on them. Overall, 70 percent of cards (debit and credit) have been converted to EMV, per CPI Card Group. The U.S. though continues to lag in full adoption. Although many large retailers, such as Walmart, Target and Costco, have upgraded their POS terminals, many smaller retail locations are still not EMV-ready.

3. 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.

“Worldpay 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 Worldpay 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. For more insights into how you can stem the rising tide of fraud, click here to download our recent whitepaper.

 

  1. Understanding the True Cost of Fraud
  2. 8 FAQs about EMV credit cards
  3. Retail Fraud Transactions Up Sharply Year Over Year, With Online Channels and Sales of Digital Goods Driving Fraud Increases