What if your chargebacks increased by 40%, practically overnight?  This is one estimate by payments industry experts of the potential impact on card-not-present (CNP) merchants that could result from the October 2015 shift to EMV chip technology in the U.S. market.  Payments companies are worried that many CNP merchants, including Internet retailers, aren’t prepared to absorb the onslaught of new fraud that will move to the CNP environment when fraudsters are shut out of card present retail.  The payments industry expects a direct correlation between the increase in fraud resulting from the EMV shift and an increase in chargebacks.

EMV is a security standard designed to protect in-store card swipes from card replication and counterfeit by use of a chip embedded in the card and in card acceptance terminals.  EMV, which stands for its three original creators (EuroPay, MasterCard, and Visa), is now run by a joint consortium of the major card networks.  The U.S. market is the last major market to deploy EMV.  When the U.K. market adopted EMV chip technology several years ago, analysts calculated that fraud in the card present retail environment dropped by almost half while fraud in the CNP environment doubled.  It is that lesson that has many in the U.S. worried, notwithstanding advancements in card authentication and other fraud detection tools in the CNP environment developed since then. 
Continue Reading Payment Processing Alert for Internet Retailers: The October 2015 EMV Shift Will Complicate Your Chargeback Management Efforts