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Credit Cards With Chips Are Reducing In-Store Fraud—But Online Breaches Are Picking Up the Slack

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Chip-based credit card readers, first introduced around 2011, have led to a 70 percent drop in counterfeit fraud in the United States, according to Visa.

Visa says more 481 million chip cards are now in circulation, representing roughly 67 percent of all Visa debit and credit cards. The company also says that nearly two-thirds of US storefronts are using chip cards—also known as “EMV” cards, named after the three companies who developed the technology: Europay, MasterCard, and Visa.


The two-third total, however, refers to stores that have completed at least one EMV transaction in the past month—so if you frequent a store with a chip reader (that seems to be malfunctioning 99 percent of the time), they made the cut. There’s a big incentive for businesses to use chip cards; those that don’t run the risk of being held liable for in-store fraud, per transaction rules established in late 2015.

Visa’s figures are based on totals offered by its client financial institutions, which are compiled by VisaNet, the company’s electronic payments network.


While EMV chips are far more secure than magstripe technology—the former has dynamic authentication features, while the latter allows cards to be copied (or “skimmed”) with relative ease—chips are only useful in preventing CP fraud, or “card present” fraud. The term refers to fraud resulting from the use of a payment card at physical store. It does nothing to prevent online theft.

Likely due to the fact that EMV cards have been widely adopted, CNP fraud (card not present) is on the rise. Increasingly, hackers are getting their hands on payment card information, and businesses are regularly leaking huge troves of credit card data online.

The US leads the world in e-commerce sales, which suggests Americans are far more likely to fall victim to CNP fraud. Data breaches affecting American consumers hit an all-time high last year—up 45 percent from 2016, according to the Identity Theft Resource Center.

Of the 179 million records exposed last year—a figure that, by the way, does not account for every single US data breach—nearly 20 percent resulted in exposed payment card information.


[Bleeping Computer]