US Online payment frauds increased as more use EMV Chips

Cases of online payment frauds in the US has increased significantly after merchants and buyers started using EMV chips rather than the traditional magnetic strips, according to ACI Worldwide report.

Business Insider has reported that the yearly cost of fraud through stolen payment information among US retailers has increased 38 percent to $32 billion in 2014. One in every 86 card-not-present (CNP) transactions were involved in fraud attempts in 2015, which is an increase from 2014's one in every 144.

This is more prevalent online and pick-up in-store shops, where merchants don't even let customers have a second run of their credit cards. Payment information can easily be accessed online, where card information is simply being entered.

Pymnts reported that EMV is supposed to give people security, but a more merchants and customers shift to it, more criminals will be attracted to CNP fraud. Online fraud is becoming more rampant as more shoppers use their mobile devices to buy through the internet and card issuers are slow on taking down accounts that have been subjected to fraudulent attacks.

"When it comes to fraud, 2015 is likely among the riskiest season retailers have ever seen," said ACI Worldwide Payments Risk Management vice president Mike Braatz in a report by Reuters. "It is critical that they prepare for a significant uptick in fraud, particularly within e-commerce channels," he said.

As the holiday season approaches, online fraud is expected to rise 28 percent, according to ACI. This firm provides electronic banking and payment solution for various financial companies, processors, and retailers all across the globe. This could happen more prevalently in omnichannel retailers that do not let their customers run their cards for a second time. As orders increase in the holiday season and merchants offer their products in multiple channels, there should be better security measures to mitigate online fraud.