EMV chip technology positions Spain as a leader in reducing credit and debit card fraud
• According to the European Central Bank, this technology has significantly reduced fraud since 2010.
• In Spain, this has resulted in profits of about 96.2 million Euros.
Currently, and after the implementation of the new EMV chip technology in our country (Spain) in 2010, the result of the effort and investment from the banking sector in its effort to improve the security and confidence of their payment methods; no one can doubt the success this technological application has had on payment cards as an instrument to minimize the risk of fraud and provide greater security for cardholders. The development and implementation of the EMV technology, initiative of financial services corporations providing payment methods (Mastercard, VISA, and JCB) seek as their main objective to ensure the highest levels of protection and security for cardholders as well as financial institutions and the corporations providing the payment methods.
The EMV chip technology by means of a chain process consisting of user-cardholder, user-merchant, issuing bank and acquiring bank has extended to include all of the participants involved in the financial process: cards, terminals (ATM and POS), authorizing centers, etc. Migration from the magnetic stripe to the EMV chip, based on cryptographic technology, has been a revolution; offering more reliable and trustworthy card transactions. However, it should be noted that how the process is managed and the results thereof have not developed equally in all European countries.
Likewise, we should not forget that as some countries have been implementing the EMV technology, the organized groups dedicated to card fraud have been focusing their criminal efforts on those countries that have not yet made the migration or are immersed in this process. According to data from Euromonitor International, since 2006 Spain is one of the countries that has obtained some of the best results regarding the fight against payment method fraud; and all through the implementation of the EMV chip. Specifically in Spain’s case, we find that the higher level of bank fraud is linked precisely to the payment method; in particular, to attempts at counterfeiting and fraudulent use of cards. But thanks to the application of cryptography, the base of the EMV chip technology; the process of verification and authentication of cardholders has been reinforced; preventing cloning and the access to the data recorded on the card. It is true that there are signs of fraud in the attempts to carry out banking transactions where the card does not have to be physically present; however, if we take a look at the data, this type of fraud is lower in Spain than in many countries of the European economic community that in some countries may reach 60% of the total fraud.
The financial sector has always been committed and involved with payment method security and has heavily invested resources to minimize the vulnerabilities that affect the sector and their clients. However, to believe in total and absolute eradication of bank fraud is a bit of a fairy tale because cybercriminals will never cease their efforts to find and invent new methods and techniques to bypass and undermine security mechanisms adopted by Banking. Although payment methods constitute a dynamic and changing area, the application and use of cryptography as a technology tool to mitigate the risk of fraud is considered the most secure tool available today. The use of algorithms and information encryption commands; based on cryptographic devices certified according to the standards required by the financial services corporations, provide added security to the banking transactions made by credit and debit cardholders making them much safer and; therefore, prevent and reduce the risks of fraud.
Fdo. Jesús Rodriguez Cabrero.
President and CEO of REALSEC.
Fuente:”Financial Tech Magazine”