The rollout of EMV, or chip-and-PIN technology, is coming soon for ATMs, and considering the rise in fraudulent activity involving cash machines, it may be just in time. But is it a silver bullet? The ATM Industry Association says it’s complicated.
Forthcoming changes to banking technology—particularly the rise of cards with baked-in computer chips—could have some important benefits for the ATM industry.
But for now, we still have the current technology—and scammers are still doing what they can to take advantage of its weaknesses.
In recent months, reports of ATM skimmers have surged: Fair Isaac Corp. (FICO), for example, reported in May that debit card compromises at standalone ATMs between January and April increased 317 percent, compared with the same period a year prior. Even at banks, debit card compromises increased by 174 percent over that same period. Those statistics represent a 20-year high for ATM attacks.
Two major ATM operators, NCR and Diebold, have each raised security concerns, according to American Banker.
“This is a significant problem that is becoming more prevalent and we want to make sure customers are aware and take preventative measures they can and should take,” NCR Director of Security Marketing Owen Wild told the publication.
Fraud Tech Improving, Too
All of this represents a challenge for the ATM Industry Association, which not only has to assist the industry with a major transition to the more secure EMV standard, but also help the industry find ways to stem a troubling trend. In comments to CBS MoneyWatch, ATMIA U.S. Executive Director David Tente notes that while technology is improving in the ATM industry, so too is the technology being used to attack ATMs.
While skimmers that attach directly to an ATM and track card scans have long been in use, newer, smaller models that also record video of a user’s keypresses have become more common.
“The devices have gotten a lot smaller,” Tente told the website. “They can be very hard to detect when they are there.”
The EMV standard—commonly known as chip-and-PIN—will likely help with matters, due in part to their use of single-use tokens. And uptake of the technology may soon pick up, because the major credit and debit card companies are expected to shift fraud liability to ATM operators next October.
The other problem with ATM skimming may be that if it stops working, scammers will simply shift their strategies. Slate notes that in Europe, where EMV is already common, ATM fraud has decreased, but fraudulent card-not-present (CNP) transactions surged—leading to an 8 percent increase in card fraud in the region.
ATMIA’s Tente emphasized to American Banker that the group is encouraging its members to take on best practices, such as the implementation of anti-skimming devices, but admitted there isn’t a silver bullet in this case—especially since, even with the move to chip-and-PIN, magnetic stripes won’t go away entirely.
“Crooks always find another way to get you,” Tente explained. “It never goes away. It just changes what it looks like.”