With issuers and retailers preparing to switch to anti-fraud, chip-based credit cards in October, 92% of finance professionals believe the technology will be effective in preventing point-of-sale fraud, according to a new survey.
Europay, MasterCard, and Visa — known collectively as EMV — set the October deadline to encourage U.S. issuers and merchants to migrate from magnetic stripe cards to the EMV chip-card technology. The new chip cards can be authenticated with a PIN number or a signature.
In its 2015 Payments Fraud and Control Survey, the Association for Finance Professionals found that 61% of respondents believe chip-and-PIN will be the most effective authentication method for mitigating fraud. Only 7% saw chip-and-signature as most effective.
The survey “should serve as a call to action for card vendors,” Jim Kaitz, president and CEO of AFP, said in a news release. “Financial professionals clearly prefer chip-and-PIN over chip-and-signature in the fight against fraud, and they overwhelmingly believe in EMV.”
According to a recent survey from CardHub, all of the major banks are in the process of issuing chip-and-signature cards, with 40% also supporting PIN capabilities. Close to two-thirds of retailers plan to also accept chip-and-PIN cards.
The AFP also said 62% of finance professionals reported that their organizations were targets of payments fraud in 2014 — a slight increase over the previous two years but still considerably lower than 2009, when a record 73% of companies were subject to attempted or actual payments fraud five years ago during the last recession.
Checks continue to be the payment method most often targeted by those committing (or attempting to commit) payments fraud, with 77% of organizations that experienced attempted or actual payments fraud in 2014 being victims of check fraud. That was down from 82% in 2013, reflecting the decline in check use at many organizations.
And 27% of survey respondents indicated their companies experienced wire transfer fraud, well up from the 14% reporting such fraud in 2013. According to the AFP, that increase “may reflect fraudsters ‘shifting their focus’ to organizations’ accounts payable departments.”