In 2016, hacked credit card fraud will reach $4 billion, a record level, and that's just the beginning of a counterintuitive aspect of the nationwide migration away from magnetic strip to chip cards.
In the short term, the switch to the chip card technology (known as EMV, which can process credit cards with embedded smart chips) will cause fraud to increase. You read that right. Beyond the $4 billion in fraud expected this year, there will be as much as $10 billion in fraud committed between now and 2020 as the window of opportunity narrows for hackers to cash in on stolen credit card data from magnetic strip cards, according to a new study from antifraud company iovation and financial industry consultant Aite Group.
There's a mad rush that's going to take place on the dark web to get the most value out of the stolen data before newer systems immediately recognize the magnetic strip card numbers as clearly fraudulent, and "it is going to get worse," said Julie Conroy, research director at Aite Group. "We should still be going to EMV, but people should not get a false sense of security."