Affinity Plus experiences 64% reduction in fraud in months following EMV...
Monday, January 25, 2016
Credit Union Insight © January 25, 2016 – Affinity Plus Federal Credit Union is reporting a reduction in fraud of 64% over the past four months since completing its conversion to EMV chip-enabled debit and credit cards in October. Additionally, Affinity Plus reports a 48% reduction in disputes in the September-December timeframe as well. The fraud reduction is especially significant considering the typical spike in fraud seen during the Christmas holiday shopping season.
Last fall, Affinity Plus was among the first financial institutions in Minnesota to complete the EMV transition, providing cutting-edge technology to its members through more than 59,000 new credit cards and nearly 118,000 debit cards.
EMV chip technology encrypts personal card information into a micro-chip embedded into the card. The cards generate a one-time use code for each transaction performed, making EMV chip card data nearly impossible to counterfeit and less attractive for criminals to steal. When making purchases at retailers that accept EMV chip technology, consumer information is protected under a higher level of security.
“Our decision to convert members’ cards to the most secure, up-to-date technology available really was a no-brainer for us,” said Affinity Plus President/CEO Dave Larson. “And based on our preliminary data, the reduction we have seen in fraudulent activity – combined with the overwhelmingly positive member sentiment and support we’ve received – makes this a win.”
In December, Affinity Plus provided additional education and information to all card-carrying members. This information was also accompanied by a member survey, seeking feedback from those who had been impacted by the conversion to EMV chip technology. (See infographic.) Affinity Plus received completed surveys from 3,000 members in less than 10 days, providing responses to the following questions and ratings on a scale of 1-10:
- 9.03 … How smooth was the Affinity Plus credit and debit card conversion to offering cards with EMV chip technology? Scale: 10=smooth, 1=difficult
- 9.59 … Do you feel that Affinity Plus takes member security seriously? Scale: 10=Yes, 1=No
- 8.24 … Knowing that EMV chip technology encrypts your personal card information when shopping at retail outlets that are equipped to accept this technology, do you feel more secure using your credit and/or debit cards? Scale: 10=Yes, I feel more secure, 1=No, I do not feel more secure
“Based on the volume of responses we received in such a short time, we most certainly have an engaged membership, and they are willing to give us their input – they speak and we listen,” Larson said. “Their opinions matter to us, and I am humbled level of trust that is demonstrated through these results. Our members truly believe that we consider their security to be a top priority.”
While EMV is the global standard for international payment and is widely regarded as one of the most significant changes to electronic payments in the last 50 years, it is not 100% foolproof, said Nic Peterson, Affinity Plus Director of Card Services. EMV chip-enabled card technology provides an additional layer of security to help reduce certain types of fraud resulting from data breaches, however it will not prevent every data breach everywhere. The greatest benefit is the reduction of fraud when using cards in-person (also called point-of-sale transactions) – but of course, only at merchants that are equipped to accept EMV cards. EMV does not prevent online fraud (also called card-not-present fraud). Ultimately, credit and debit information can still be obtained by fraudsters if a merchant is storing unencrypted data. Affinity Plus will continue to reissue cards to members who experience a compromise in either of these situations.
According to Peterson, Affinity Plus data shows that only 6.4% of debit card transactions and 11.9% of credit card transactions are being processed by merchants as EMV.
“In order for consumers to receive the full protection from data breaches that EMV chip technology can provide, merchants need to get in the game,” Peterson said. “Financial institutions and merchants have an equal role in ensuring the greatest level of security in a payment system, and I’m proud of the fact that we at Affinity Plus are doing our part to offer the latest level of protection for our members.”
About Affinity Plus Federal Credit Union
Affinity Plus Federal Credit Union is a not-for-profit, financial cooperative that puts people first above profits. Members of Affinity Plus receive maximum value through competitive rates, minimal fees, and unique, member-centric products and programs. Affinity Plus has 27 branches located throughout the state. With over $1.7 billion in assets with $3.5 billion in assets under management, Affinity Plus is based in St. Paul and is owned by more than 180,000 members. Additional information is available at www.affinityplus.org or by calling (800) 322-7228.