I’m just finishing a trip overseas, now in Holland where I’ve been meeting with banks and other Gartner clients. The verdict is in – Chip cards are in fact working to substantially reduce losses from counterfeit cards. Some of the banks I met also instituted geo-blocking to stop the cards’ magnetic stripe from being accepted in certain countries. One major bank told me EMV chip combined with geo-blocking has brought their card present fraud down as low as possible.
I think most of us know this already but it’s always good to hear it again. Yes, the fraud shifts to ecommerce channels when chip cards are implemented, but thankfully there’s plenty of good technology out there to stop ecommerce fraud as well.
By the way, I understand that the financial institutions and the retailers in the U.S. are now debating whether the U.S. should implement Chip and Signature or Chip and PIN. Supposedly, the rates will be the same on each (I’m not sure but that’s what I hear), but I imagine it comes down to who eats the fraud if it occurs. With PIN, banks will likely eat the fraud – with Signature the retailers are more likely to because the issuer can always claim the retailer didn’t check the signature properly.
The rest of the world has implemented Chip and PIN. Handicapped people who can’t enter their PIN are accommodated with special cards that don’t require one.
Frankly, I prefer entering my PIN over signing my name. It’s much faster.
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