Munich Personal RePEc Archive

The Impact of the Microchip on the Card Frauds

Ardizzi, Guerino (2012): The Impact of the Microchip on the Card Frauds.

[img]
Preview
PDF
MPRA_paper_41435.pdf

Download (126Kb) | Preview

Abstract

The issue of frauds through payment cards has received a great deal of attention from authorities. A large share of card frauds can be ascribed to the phenomenon of counterfeiting of debit cards, widely used payment instrument in “face-to-face” transactions. With the advent of the Single Euro Payment Area, the European banking community has shared and almost reached the ambitious goal of replacing all the cards (and accepting terminals) with chip compatible ones, which are supposed to be harder to clone than the magnetic stripe card. Using a bi-annual balanced panel data of over one hundred Italian banks, in this paper we estimate for the first time the real impact on card frauds caused by the chip card migration. The results confirm the positive effects of the new technology: the ratio between fraud and ATM-POS transactions (card fraud loss rate) is reduced significantly if the chip card is present.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.