The Evolution of Europay, MasterCard, and Visa (EMV) and the Impacts on Credit Card Fraud

Sakeena Wilkins, La Salle University


The objective of this capstone project will be to explore the impact Europay, MasterCard, and Visa (EMV) micro-processing chip technology had on credit card fraud within the United States (U.S.). EMV, bank card issuers, and retailers agreed to begin the transition to chip card financial instruments and EMV specifications on October 1, 2015, which is known as the Fraud Liability Shift (FLS) date. Credit card fraud statistics will be evaluated prior to and following the liability shift date within this capstone.

There are varying types of credit card fraud, however, EMV specifications are primarily focused on combating counterfeit fraud. The typical method in which a counterfeit card is produced is called Skimming. The historical process for conducting a point of sale credit card transaction was through the validation of a magnetic stripe imprinted on the back of the credit card. The magnetic stripe includes static data, such as, customer information, credit card number, Card Verification Value (CVV), country code, and expiration date. Although the data embedded within the magnetic stripe is unforeseen to the human eye, through the utilization of technology the data is very easy to copy, clone, and replicate by fraudsters. The magnetic stripe information during skimming schemes are typically stolen when fraudsters place their equipment on top of legitimate stripe readers at unattended locations, such as ATMs or gas pumps. Upon the implementation of chip cards, the risk of counterfeiting credit cards was lowered as the technology utilized to process a transaction by way of an EMV microchip is very complex. Chip cards when utilized at the point of sale exchange data that is only good for one-time use. The dynamic data embedded with the microchip versus that static data of a magnetic stripe has been a hindrance for fraudsters since the fraud liability shift date.