New data from CardFlight points to the fact that more merchants are embracing EMV technology and accepting chip cards on a regular basis.
When the EMV migration occurred last October, just 2% of transactions were processed as chip-on-chip, while 44% were EMV cards processed as magnetic stripe transactions and 54% were non-chip cards.
Chip-on-chip skyrocketed through June. Just under half of CardFlight transactions were chip-on-chip, while 24% were chip cards processed via mag stripe and 30% were non-EMV. That points to an increase in not just EMV terminal upgrades, but EMV activations, which could decrease fraud across the industry.
CardFlight’s data indicates that friction in the US EMV migration is beginning to taper. In the past, merchants, especially small- and medium-sized businesses like those targeted by CardFlight, were hesitant to upgrade to chip-enabled terminals because they believed the costs outweighed the benefits. Ultimately, decreased fraud and increased customer awareness of EMV pushed more merchants to upgrade.
But upgrading proved challenging for merchants, because a time-consuming terminal certification and activation process created a significant lag between when merchants upgraded to an EMV terminal and when they could begin accepting chip-on-chip transactions. That prompted card networks to introduce solutions that simplified the process and reduced the associated time frame.
CardFlight’s rising chip-on-chip data reflects that merchants are beginning to catch up to consumers in adopting and enabling EMV. As that occurs, this should further accelerate chip-on-chip transactions, because a huge share of consumers already have chip cards. For context, Visa disclosed that it expects 75% of its US credit cards representing 96% of credit volume to be chip-enabled by the end of the year.
Fraud cost U.S. retailers approximately $32 billion in 2014, up from $23 billion just one year earlier. To solve the card fraud problem across in-store, online, and mobile payments, payment companies and merchants are implementing new payment protocols that could finally help mitigate fraud.
John Heggestuen, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on payment security that looks at how the dynamics of fraud are shifting across in-store and online channels and explains the top new types of security that are gaining traction across each of these channels, including on Apple Pay.
Here are some of the key takeaways from the report: