Mastercard Chip Momentum: Reducing Fraud One Year In
September 12 2016 - 8:00AM
Business Wire
Chip Cards in Market at 88 Percent as
Chip-Active Terminals Reach 33 Percent
At the one year anniversary of the shift to chip approaches in
the U.S., Mastercard today unveiled data confirming the positive
impact the technology is having on issuing banks, merchants and
consumers. To date, chip adoption continues to grow:
- As of July 2016, 88 percent of
Mastercard U.S. consumer credit cards have chips, representing a
105 percent increase in chip card adoption since the October 1,
2015 liability shift.
- The company also sees 2 million
chip-active merchant locations on its network, a 468 percent
increase in chip terminal adoption since October 1, 2015. Two
million merchants represent 33 percent of all U.S. merchants.
- Of the 2 million chip-active merchant
locations, 1.3 million are regional and local merchant locations,
representing a 159 percent increase since October 1, 2015.
“Since 2012, Mastercard has championed chip technology. We need
chip cards in wallets and chip terminals at checkout to continue to
drive card fraud out of the U.S. This country is one of the most
complex markets in the world so we know things won’t change
overnight,” said Craig Vosburg, president of North America for
Mastercard. “However, we’re encouraged by the significant progress
over the last 11 months. With every additional chip transaction we
move closer and closer to our collective goal – moving fraud out of
the system.”
Chip Impact on Merchants
The biggest benefit of chip technology is minimizing the cost of
fraud caused, in part, by the use of counterfeit cards. Now, the
chips in terminals “talk” with the chips on cards creating unique
codes for all purchases. The unique codes protect cards from being
counterfeited.
Mastercard fraud data shows a 54 percent decrease in counterfeit
fraud costs at U.S. retailers who have completed or are close to
completing EMV adoption, when comparing April 2016 to April 2015.
Demonstrating the power of EMV and the risk of not adopting it,
counterfeit fraud costs increased by 77 percent year-over-year
among large U.S. merchants who have not yet migrated or have just
begun the migration to chip.
“Payment cards are an essential part of commerce; EMV requires a
change to the customer experience as the industry shifts from swipe
to chip,” said Brian Riley, director, Credit Advisory Service,
Mercator Advisory Group. “There is no doubt chip cards will curtail
fraud and it is exciting to see enhancements at the point of sale
that will propagate usage, reduce friction and accelerate
transaction time.”
Mastercard continues to work closely with merchant partners to
ease the adoption of chip. Recent initiatives and programs have
included: speeding the terminal certification processes from days
to hours, while maintaining quality; adding more intelligence on
its network to minimize chargeback costs to merchants; and
introducing M/Chip Fast, a new application to help speed
transactions and shoppers through checkout lines.
U.S. Consumers Prefer
Chip
U.S. consumers have also been central to chip card adoption.
While there was an initial learning curve on the chip experience,
they now also are seeing the benefit of increased chip safety and
security.
Chip card use continues to rise in the U.S. according to a
recent Mastercard survey of over 1,000 U.S. consumers:
- Nine-in-ten Americans commonly use chip
cards, a 38 percentage point increase year-over-year, from 49
percent in 2015 to 87 percent in 2016.
“As more U.S. cardholders use their Mastercard chip cards, they
are learning the benefits of increased safety and security. It’s no
small undertaking to change the way people pay for things. The only
reason to start this big a task is to make people’s lives better.
Chips have the potential to do just that,” said Chiro Aikat, senior
vice president of product delivery – EMV, Mastercard.
METHODOLOGY:
Braun Research conducted an online survey in the United States
between June 27 and July 15, 2016 among a nationally representative
sample of about 1,000 general population consumers, 18 years of age
and older. The sample was weighted to be nationally representative
of the US population as it relates to age, gender and region, as
well as ethnicity/race. At the 95 percent confidence level, the
margin of error is about +/- 3.1 percent.
About Mastercard
Mastercard (NYSE: MA), www.mastercard.com, is a technology
company in the global payments industry. We operate the world’s
fastest payments processing network, connecting consumers,
financial institutions, merchants, governments and businesses in
more than 210 countries and territories. Mastercard products and
solutions make everyday commerce activities – such as shopping,
traveling, running a business and managing finances – easier, more
secure and more efficient for everyone. Follow us on Twitter
@MastercardNews, join the discussion on the Beyond the Transaction
Blog and subscribe for the latest news on the Engagement
Bureau.
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version on businesswire.com: http://www.businesswire.com/news/home/20160912005391/en/
Mastercard CommunicationsBeth Kitchener,
914-249-2058beth.kitchener@mastercard.com
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