Visa Says EMV Chip Cards Continue To Gain Share and Cut Counterfeit Fraud

EMV chip cards continued to gain share of U.S. card payments in early 2019, although their conquest is not yet complete more than three years after the payment card networks’ EMV liability shifts. But Visa Inc. says counterfeit fraud is dropping sharply, as intended.

Visa reported Thursday that 3.5 million U.S. merchant locations accepted EMV chip cards as of March, up about 400,000 locations from 3.1 million in December 2018. Those locations represented 75% of card-accepting storefronts in March compared with 68% three months earlier , according to Visa data.

Chip-based Visa payment volume totaled $81 billion in March on 1.94 billion transactions. Some 99% of March’s volume came from chip cards, up incrementally from 98% in December.

EMV cards are a strong antidote to counterfeit fraud at the point of sale, a type of fraud from which the earlier generations of magnetic-stripe cards offered little protection. Visa says counterfeit-fraud dollar volume at merchants that have completed their EMV upgrades was down by 76% as of December from levels seen in September 2015, just a month before the networks’ EMV liability shifts took effect. And counterfeit fraud for all merchants is down by 49%, Visa reports.

The number of active Visa U.S. EMV credit cards, however, fell to 205.1 million in March from 213.6 million three months earlier. Visa says seasonality—reduced active card use in the first quarter versus high usage during the holiday period in the fourth—was the likely cause.

Visa-branded EMV debit cards totaled 303.9 million in March, up from 297.5 million in December. Due to the credit card decrease, the total number of active Visa EMV cards fell less than 1% to 509 million from December’s 511.1 million. Some 71% of Visa cards have a chip, unchanged from December.

Under the liability shifts, merchants bear financial responsibility for counterfeit fraud from a transaction if their POS terminals can’t read an EMV card’s chip. While EMV has been highly effective at reducing counterfeit fraud, fraudsters have turned their attention to card-not-present channels and identity fraud.