According to Ellen Richey, Vice-Chairman of risk and public policy for Visa, the rate of fraud is on decline and currently stands at about 6 basis points. Visa forecasts 2015 to be a turning point in EMV migration with more than 50% of cards and terminals in the US to be chip-enabled by the end of 2015.
Apart from occasional data breaches from merchant websites, counterfeiting of card and card not present at the time of transaction are the two main types frauds the payment industry currently faces. Card data falling into the wrong hands is one of the big problems the industry faces as online transactions typically do not require the card to be presented. The information sitting on the card and other customer authentication details are sometimes compromised and used for transactions.
Visa uses a combination of sophisticated analytics to simple rule based transaction disciplines to prevent fraud. Tokenization of transactions using dynamic pins and encryption of data along with biometric authentication and verification of customer location using latest technologies are used in preventing fraud.
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