Fraud Isn’t New

Especially card payment fraud, which amounted to nearly $16 billion in losses according to the latest year’s stats, but remarkably, only added up to 1% of all card sales. Of course, cardholders are shielded from liability for the most part, so card issuing banks bore 62% of losses with merchants taking 38%. The former typically occurs at point-of-sale (card present) locations due to stolen card data being re-encrypted onto a new card, and the latter losses happening to merchants from web sales (card-not-present). The emergence of EMV, or chip cards, is meant to reduce the card-present fraud type, since fraudsters are not yet able to replicate chip cards. More facts: the U.S. generates about 21% of worldwide credit card usage, but accounts for 48% of fraud. Retailers incur $580 million in annual debit card loss of which 85% are from signature debit cards versus PIN debit cards.

Until recently, the card issuers were taking these losses, but due to the EMV migration, any merchant that accepts a mag stripe card which has been fraudulently reprogrammed is now liable. And here’s a fact that you can rest easy with: Dharma Merchant Services has the latest EMV certified point-of sale-systems as well as the latest online fraud detection services for our web-based merchants that will better protect them from fraudulent activity.