Banks issuing EMV chip cards stand to increase their revenues and market share, given consumers’ appreciation of the greater security provided by the cards, according to a white paper by solutions firm, Welcome Real-time. With the average acquisition cost for a new credit cardholder estimated at USD 120 apiece, any increase in a bank’s issuing base translates directly to its bottom line. In this respect, banks can use EMV with customer-centric enhancements to maximize their investment and override the fact that a country’s fraud losses may be lower than the required investment in cards, terminals and infrastructure.

UK banks, for instance, are expected to spend over Stg 1 billion on upgrading their payment systems for EMV, at an average of Stg 26 per card, yet the country’s credit card fraud was less than half this total in 2001, according to Welcome Real-time. Given the expected rise in card-not-present (CNP) fraud, banks will have to increase the security of cardholder data to prevent ‘data harvesting’ by employees at their institutions. The onset of EMV will trigger an increase in internal data theft at financial institutions, which criminals will turn to as the most effective way to gather cardholder data while still covering their tracks.

In short, businesses should expect an increase in identity theft as criminals wanting to use stolen cards at real-world stores, will need to use false details to have an EMV card issued to them. To combat the related increase in CNP fraud, online merchants are also likely to look to single-sign-on authentication systems, passwords or PC-based smart card readers to verify their customers’ identity. With the rise of ‘phishing’ scams, where consumers inadvertently reveal the personal data needed to access bank or credit card accounts, banks will need to tighten up their online authentication methods.

(PR Newswire)