It’s a well-understood phenomenon in the payments space: Fraudsters are opportunists who will adapt their tactics to focus on the most vulnerable parts of the payments ecosystem. Sort of a criminal version of “whack a mole”.
According to a report by TransUnion, adoption of EMV at the retail point of sale is causing a steep increase in ecommerce-based fraud. The phenomenon is nothing new, similar fraud shifts occurred in Canada, Australia and the U.K. during those markets’ EMV conversions. After all, it’s a lot easier to pull off a data breach or fraud in a non-EMV ecommerce environment which still mostly relies on antiquated userid/password authentication.
Experian reports that 2015 was a banner year for data breaches, with over 5 million consumer records exposed to compromise. And in a recent Computer World survey, an amazing 1 in 5 Information Technology professionals reported that their company experienced a mobile data breach.
EMV will certainly improve the retail fraud picture and innovations in authentication such as biometrics and multi-factor authentication will help. But will still have a long way to go… I have always said that fraudsters are a bit like a rabid dog running one step behind you. If you let down your guard for even a moment, you will get bitten.