Slow shift to EMV opens door to skimmers

After many years of having comparatively low fraud statistics on debit cards, Australia now seems to be catching up. The skimming or counterfeiting of debit cards, not including scheme debit cards, was up 55 per cent in the financial year to 30 June 2008, to 16,157 cases.

Card-not-present fraud perpetrated in Australia on Australian issued credit and charge cards was up about eight per cent, from 57,201 instances last year to 61,705 this year.

"We are now starting to see a long anticipated migration of counterfeit and skimming fraud to Australia from offshore," said Chris Hamilton, Chief Executive Officer of APCA.

The low levels of fraud on Australian cards has long been held up by the industry as the reason why EMV chip debit cards have a weak business case in this country.

"We are hitting critical mass with chip cards now, all major issuers are working hard on migrating cards and terminals; we are getting there," said Hamilton.

Albert Naffah from MasterCard says rising fraud statistics can only make the EMV business case more viable. However, he is referring to credit cards.

"If fraud is increasing then the business case for investing in the technology becomes more viable but the implementation of EMV is already quite advanced.

"The big banks have rolled out EMV for new card holders and are gradually migrating their existing card holders across, as well as some of the others, Citibank, HSBC so it is rolling along quite nicely as we speak."

Cheque fraud continues to fall away even faster than the drop off in overall usage of cheques and is at absolutely negligible levels.

Australian banks for years favoured a slow transition to EMV on the grounds - underpinned by a PricewaterhouseCoopers study undertaken in 2000 - that there was no business case for a conversion to chip cards.

The eight-year-old PwC study did note that a rising incidence of fraud may eventually lead to a viable business case.