Chip Card Use Rises While Fraud Decreases

Chip Card Use Rises While Fraud Decreases

 

Chip card transaction volume continues to rise as the United States payments industry nears the one-year mark since the Oct. 1, 2015, liability shift, totaling 554.8 million in July, a 26% increase from 440.1 million in May, Visa Inc. announced Tuesday. Since November, Visa’s chip card transactions have more than tripled.

Digital Transactions News estimates that chip-on-chip EMV transactions now account for 11.1% of all Visa U.S. transactions, using data from the brand’s third-quarter results.

Many observers pay close attention to chip card transactions because this shift from typical swipe transactions is such a huge undertaking which was supposed to decrease card-related fraud.  Payment volume made with Visa chip cards also increased in July, totaling $31.3 billion, a 21% increase from $25.9 billion in May, and a 159% increase from November’s tally of $12.1 billion.

Visa says that 1.38 million merchant locations now accept chip cards, meaning they have the equipment and software to actively accept the cards. That’s a 14% increase from 1.21 million in May and a 100% increase from 690,000 in November of 2015. More than 75% of these locations are small and mid-size business, Visa says.  Recently Visa, MasterCard Inc., and Discover Financial Services instituted changes to the EMV certification process that include a reduction in testing requirements and an easing of EMV chargeback policies. The changes could make it easier for many merchants to enable EMV acceptance. American Express Co. also recently revised its EMV chargeback policy.  Visa said the total number chip cards now in circulation is 345.9 million, a 14.5% increase from May’s total of 302 million and a 77% increase from the November total of 195.4 million. Of the 345.9 million cards in use, 174.5 million are debit cards and 171.4 million are credit cards.

EMV chip cards appear to be having an effect on deterring counterfeit card fraud. This type of fraud at chip-enabled merchants decreased 38% in April, compared with April 2015, Visa says. The impact of that reduction is not yet reaching consumers, suggests a recent Auriemma Consulting Group survey of 500 debit cardholders. In it, 46% say it is likely they will experience card fraud in the next five years.  Studying the impacts of the new chip cards will continue, but it definitely seems to be making a positive impact.

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