U.S. consumers have, over the past two years, become grudgingly more aware of their payment transactions. This is not out of a necessity for financial awareness so much as the need to pay greater attention to the point-of-sale terminal to determine whether it requires the old standard swipe action or the latest EMV chip card protocol. While many cardholders may grumble about the change, most are aware of the benefits of chip-enabled cards and terminals when it comes to keeping their financial information secure.
However, even though the majority of U.S. financial institutions have issued EMV cards to their customers and members, many ATMs are still lagging behind. Whether managed in-house or outsourced to professional ATM operators, here are three reasons banks and credit unions should be making sure their machines are upgraded to the latest card standard.
1. Fraud migration is already happening. As other regions implemented EMV protocols, card fraud quickly moved to the path of least resistance. Those ATMs that are not EMV compliant are at greater risk of increased criminal activity – even if they are in lower populated areas, according to information shared by Citibank Latin America at the 2014 ATM & Mobile Innovation Summit.
“Don’t play the numbers game,” said Alvero Cordoba, ATM & channels head for Citibank Latin America. Due to an increase in fraud and other factors, the bank was forced to reduce their ATMs in a specific country from thousands to a mere three hundred. Said Cordoba, “The next month, the fraud had increased. On just those three hundred ATMs.”
2. Consumers are becoming more aware. Despite the slow introduction, U.S. consumers are gradually starting to understand the significance of the chip in their new cards. While the chip does not protect stolen card data from use online, it does reduce the ability for criminals to use their information to make in-person purchases. This increased security is appealing and, as seen in other countries, it is expected that many will begin to more readily frequent locations with EMV capabilities over swipe-only ATMs.
3. Fraud Liability. Financial institutions with in-house ATMs that have not upgraded to EMV are already at risk for any card fraud performed at their ATM through MasterCard transactions. As of October 2017, this risk increases as Visa and other networks switch liability. Institutions with outsourced ATMs may still be at risk, depending on contract and setup of the outsourcing program.
The majority of developed countries have already migrated to the EMV chip-card standard, leaving the United States as one of the last bastions for criminals to capitalize on stolen card data off-line. In order to protect cardholders, reputation and bottom line ensuring ATMs are fully upgraded is essential. Financial institutions with outsourced networks should speak with their ATM provider to ensure equipment is fully updated and approved to complete EMV transactions.
For more information on branding EMV ready ATMs for your financial institution, contact BFC Enterprises.