Solupay Blog

Card Not Present (CNP) Fraud Post-EMV Rollout in the United States

Posted by on 06/9/18 7:29 AM


The introduction of EMV chip cards made huge strides in decreasing fraud, but only for in-store transactions. The increased security of credit and debit cards using chip technology has driven fraudulent traffic to CNP transactions and e-commerce. Card Not Present (CNP) Transactions are those that occur when the card is physically not present (online, over the phone, mobile transactions, etc), and therefore do not utilize the chip feature that EMV cards have. According to Visa, fraud has decreased 70 percent from October 2015 (when chip cards were introduced in the United States) to December 2017. However, chip cards are just as susceptible to CNP fraud as magnetic stripe cards.

CNP fraud has been made easier by data breaches, such as the Equifax breach, that leaked more that 143 million U.S. consumers’ data onto the dark web. In addition to credit card data, users on the dark web were able to access birth dates, driver’s license numbers, and even social security numbers. Equifax is unsure exactly how long the dark web had access to consumer’s confidential information, but they have concluded it lasted about 4-6 months. During this time CNP fraud spiked tremendously. By the end of June 2017, there had been a 29% increase in CNP fraud compared to the previous year.

The United States has the highest number of e-commerce sales, so it’s no surprise that the US is more vulnerable to CNP fraud than other countries. CNP fraud is projected to increase an additional 39% over the course of 2018. With CNP fraud running rampant, many e-commerce merchants have considered limiting international sales or eliminating them altogether, because international transactions are more difficult to authenticate. However, this would cause a huge decrease in sales for vendors who choose to do so.

Instead of trying to avoid fraud, it’s time that merchants adopt vigilant anti-fraud software. These programs help good customers get approval quicker, while vastly reducing the number of fraudulent transactions. Now that people travel more often and own property in more than one country, it is essential that merchants are not shutting out good business because they’re afraid of international fraudulent activity. If your business is looking to adopt a new system to prevent fraud, consider Solupay’s 3D Secure Advanced. It is specifically designed for e-commerce merchants to reduce fraud, while increasing profit margins by eliminating friction at checkout.

To learn more about 3D Secure Advanced, download “The evolution of 3D Secure” Whitepaper.


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