1. How will EMV Change Online Business in the U.S.?
In less than 7 months, the deadline for complying with EMV will hit in
the U.S. Many banks and retailers are starting to use the system earlier,
because of recent data breaches. Long used in Europe and other regions,
this system uses credit cards with an embedded chip, requiring new
Point of Sale (POS) readers on the merchant side.
The chip makes cards more difficult to counterfeit for in-person use, and
does not retain the PIN entered at POS by the consumer. This new
system, though expensive to implement for both merchants and banks,
will make POS transactions much more secure, but introduces the threat
of fraud in card-not-present transactions because the chip provides no
benefit when the card is not present.
In Europe and other regions, when the EMV cards were introduced, in-
person fraud went way down, while card-not-present (CNP) fraud
skyrocketed. Experts expect the same to happen in the US. To combat
the threat of CNP fraud, the use of 3-D Secure was mandated in other
regions,and merchants implemented protocols like Verified by Visa,
MasterCard Secure Code, American Express SafeKey, and others. As a
result, CNP fraud in those areas has gone down, but has now started to
rise in the US.
According to a recent survey on Consumer Authentication fewer than
half of merchants in the U.S. use a Consumer Authentication solution
today. In the EU countries, Asia-Pacific and the Middle East, more than
60% of merchants are enrolled in a Consumer Authentication program.
U.S. merchants with an online presence are going to have to start
thinking about a Consumer Authentication solution now, if they have
not already. For many CNP merchants, today, fraud is not a big issue, but
a few large chargebacks could really hurt a business’ bottom line.
Consumer Authentication has other benefits, besides fraud protection
for online and mobile transactions. With a Consumer Authentication
solution like Cardinal’s rules-based solution, merchants usually will
benefit from increased sales, liability shift on chargebacks, less manual
review and interchange fee savings.

2. Merchants will also see a sales increase with a Consumer Authentication
solution because there are fewer “false positives” that might ordinarily
be declined, internally and externally. Merchants also enjoy a liability
shift with fraudulent chargebacks on Cardinal Consumer Authentication
transactions because the issuing banks will take on the risk if any
transactions result in fraud. Consumer Authentication also results in
less manual review, because many transactions that might have
required manual review without Consumer Authentication are
approved on the spot. Less manual review means a cost savings for the
merchant. Merchants save on interchange fees because the networks
realize there is less risk associated with these transactions, and offer
merchants a lower rate for Consumer Authentication transactions.
AMG SecurePay’s Authentication solution is better than traditional 3-D
Secure because it allows merchants to choose which rules to implement
and which consumers to authenticate, based on the type of Consumer
Authentication experience that is about to occur with the shopper.
How will EMV Change Online Business in the U.S.? This approach
results in more sales, less cart abandonment and fewer chargebacks.
The addedbenefit to merchants is that with AMG SecurePay, they don’t
have to worry about keeping up with the technology, because Advanced
Merchant Group handles that..
AMG’s anticipated challenges in the card-not-present industry, and has
built our technology with this flexibility in mind. The products and
services we offer our Customers evolve with the payment industry. With
EMV rolling out in the US, the rise of tokenization and multi-factor
authentication methods, our platforms are positioned to deliver the
benefits of these advancements to customers.
To wrap up, EMV’s rollout in the US will be a good thing for brick-and-
mortar merchants, but will open up opportunity for fraud for CNP
merchants. If your business includes a CNP component, you will want to
make sure you are ready by having a Consumer Authentication strategy
in place. Not only will you benefit from increased sales, fraud protection,
liability shift and lower interchange fees, you will have the assurance
that fraudsters will not affect your bottom line.