Card Not Present Fraud , Fraud Management & Cybercrime

Cross-Border Impact of EMV Liability Shift

U.S. merchants that have not yet completed their migration to EMV should brace for upticks in chargebacks from international card issuers, says Gord Jameison, head of Canadian risk services for Visa.

That's because European and Canadian banks, which until Oct. 1 absorbed fraudulent transactions conducted in the U.S. with counterfeit mag stripe cards created using their stolen cardholder data, can now charge U.S. merchants for fraud that affects their customers.

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Fraudulent payments made in the U.S. with card data stolen from international cardholders is a leading cause of fraud loss for European and Canadian banks, according to the PCI Security Standards Council.

While it's difficult at this point to know exactly how much fraud might shift back to U.S. merchants from institutions in other nations, Jameison says that within the next 30 to 90 days, the industry will have a much clearer picture.

In this video interview at Information Security Media Group's recent Fraud Summit in Toronto, Jameison explains why the U.S. EMV migration still has a long way to go. "On the merchant side, Oct. 1 is the start date for a journey that's probably going to last four or five years," he says.

Jameison says most big box retailers in the U.S. were EMV-ready before Oct. 1 liability shift date. But experts anticipate that fraud will migrate to the points of least resistance, which will be the smaller merchants that have not yet made EMV upgrades, he notes.

During this interview, Jameison also discusses:

• How Canada's EMV liability shift impacted merchants;
• Similarities and differences of the EMV migrations in the U.S. and Canada; and
• How contactless mobile payments will improve security.

At Visa, Jameison is responsible for delivering value-added services; engaging local clients to influence security and fraud outcomes; demonstrating Visa's risk management leadership to regulators and clients; reporting client and Canada fraud performance by fraud type against benchmark standards and objectives; and managing Visa compliance risk programs. Before joining Visa in 2001, Jamieson served as a member of the Royal Canadian Mounted Police for 20 years. He has extensive experience investigating organized crime involvement in forged credit card manufacturing and distribution and is recognized by the Canadian courts as an expert in card fraud investigation.