Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Endpoint

10/8/2015
10:30 AM
Deborah Baxley
Deborah Baxley
Commentary
Connect Directly
Twitter
LinkedIn
RSS
E-Mail vvv
50%
50%

Chipping Away At Credit Card Fraud With EMV

As of October 1, so-called chip-and-pin technology is now the law of the land for electronic payments in the US. But it's not the silver bullet that will instantly stop all cybercrime.

America is the last country in the world to implement EMV, according to the card industry standards group EMVCo. But it is finally here. 

What took so long?  Part of the answer is that US banks were already doing a good job monitoring and catching fraud using data analytics to detect suspicious patterns, which made the expense of shifting to new technology hard to justify. Unfortunately, as one region after another implemented EMV, the US became a haven for credit card fraud, accounting for nearly 50 percent of global fraud losses, according to the Nilson Report.

EMV’s main target is to eliminate in-person counterfeit fraud. In contrast to magnetic stripe cards that can be quickly and easily manufactured in the thousands by criminals using stolen card numbers, chip cards are virtually impossible to clone or counterfeit. If an EMV card is counterfeited to look like a magnetic stripe card, it would be rejected by an EMV-enabled point-of-sale terminal because the system recognizes that the card should have a chip and doesn’t. If the user is not able to insert the chip portion into the reader the incident of fraud is thwarted. 

That’s a definite improvement. But, sadly, EMV is not a silver bullet that will instantly stop all fraud.  EMV still cannot address e-commerce or mobile commerce “Card-Not-Present” (CNP) fraud.  In other countries credit card fraud migrated to the CNP channel after EMV was introduced.  Equally disheartening is the fact that, according to Strawhecker Group,  in the US, merchants and ATM owners will remain fraud targets because it will be a number of years before we reach significant adoption of EMV.

In the meantime, one strategy the retail and banking industry can use to protect itself against relentless and mutating fraud attacks should include a layered approach to security, involving:

  • End-to-end encryption, in which all data transmitted from the point-of-sale until it reaches the firewall of the secure bank environment.
  • Tokenization, a technique that devalues card numbers. The card’s actual account number is swapped with a surrogate value which has little to no value if compromised.  Apple Pay is an example of this technique; the card number stored in the phone is actually a token.
  • Security best practices such as Payment Card Industry Data Security Standard (PCI DSS).  A hallmark of the standard is that no real account data should be stored in the clear.
  • Authentication techniques, including device authentication and fingerprinting, one-time passwords, randomized PIN pad to thwart key logging, and biometrics.
  • Fraud detection, including data analytics, address verification and Card Verification Value (CVV) verification.

Shifting liability 
Whille the recent October 1 deadline for fraud liability represents the beginning of an evolution, it's imperative that all industry stakeholders maintain a vigilant eye on fraud patterns.  

What does the liability shift mean? In the past, banks paid for counterfeit credit and debit card fraud losses, provided the merchant properly authorized the transaction. Starting in October, if a counterfeit transaction goes through at a merchant that does not have EMV equipment, the bank passes the loss to the merchant. Some merchants -- and especially ATMs -- are prime targets for counterfeit activity: think jewelry, electronics, gift cards, liquor, gambling and gasoline. (Because of the additional complexity, gas pumps have a two-year grace period before having to upgrade equipment.)

Each enterprise and merchant will make their own decisions on when to upgrade.  Keep in mind though, there are other benefits to shifting to EMV.  Along with EMV enablement, nearly all modern point-of-sale equipment supports mobile and contactless payments.  In effect, upgrading to EMV will also bring merchants into the world of modern payments, because they will be able to accept Apple Pay, Samsung Pay and Android Pay from consumers’ phones and watches.

Deborah Baxley is an international retail payments consultant, recognized expert in the industry, creator of growth strategies for new and existing markets and 30-year IBM veteran with more than 15 years experience consulting to cards and payment companies. Baxley is a ... View Full Bio
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
HAnatomi
50%
50%
HAnatomi,
User Rank: Apprentice
10/8/2015 | 11:48:22 PM
Biometrics?
Bringing biometrics in the scheme could end up with pleasing criminals.

Whether face, iris, fingerprint, typing, gesture, heartbeat or brainwave, biometric authentication could be a candidate for displacing the password if/when (only if/when) it has stopped depending on a password to be registered in case of false rejection while keeping the near-zero false acceptance.

 Threats that can be thwarted by biometric products operated together with fallback/backup passwords can be thwarted more securely by passwords alone. We could be certain that biometrics would help for better security only when it is operated together with another factor by AND/Conjunction (we need to go through both of the two), not when operated with another factor by OR/Disjunction (we need only to go through either one of the two) as in the cases of Touch ID and many other biometric products on the market that require a backup/fallback password, which only increase the convenience by bringing down the security.

 
Mobile Banking Malware Up 50% in First Half of 2019
Kelly Sheridan, Staff Editor, Dark Reading,  1/17/2020
Exploits Released for As-Yet Unpatched Critical Citrix Flaw
Jai Vijayan, Contributing Writer,  1/13/2020
Microsoft to Officially End Support for Windows 7, Server 2008
Kelly Sheridan, Staff Editor, Dark Reading,  1/13/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: This comment is waiting for review by our moderators.
Current Issue
The Year in Security: 2019
This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
Flash Poll
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
Organizations have invested in a sweeping array of security technologies to address challenges associated with the growing number of cybersecurity attacks. However, the complexity involved in managing these technologies is emerging as a major problem. Read this report to find out what your peers biggest security challenges are and the technologies they are using to address them.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2019-15625
PUBLISHED: 2020-01-18
A memory usage vulnerability exists in Trend Micro Password Manager 3.8 that could allow an attacker with access and permissions to the victim's memory processes to extract sensitive information.
CVE-2019-19696
PUBLISHED: 2020-01-18
A RootCA vulnerability found in Trend Micro Password Manager for Windows and macOS exists where the localhost.key of RootCA.crt might be improperly accessed by an unauthorized party and could be used to create malicious self-signed SSL certificates, allowing an attacker to misdirect a user to phishi...
CVE-2019-19697
PUBLISHED: 2020-01-18
An arbitrary code execution vulnerability exists in the Trend Micro Security 2019 (v15) consumer family of products which could allow an attacker to gain elevated privileges and tamper with protected services by disabling or otherwise preventing them to start. An attacker must already have administr...
CVE-2019-20357
PUBLISHED: 2020-01-18
A Persistent Arbitrary Code Execution vulnerability exists in the Trend Micro Security 2020 (v160 and 2019 (v15) consumer familiy of products which could potentially allow an attacker the ability to create a malicious program to escalate privileges and attain persistence on a vulnerable system.
CVE-2020-7222
PUBLISHED: 2020-01-18
An issue was discovered in Amcrest Web Server 2.520.AC00.18.R 2017-06-29 WEB 3.2.1.453504. The login page responds with JavaScript when one tries to authenticate. An attacker who changes the result parameter (to true) in this JavaScript code can bypass authentication and achieve limited privileges (...