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After EMV migration, card fraud plunges at Minnesota FI

In the past four months, the FCU says its fraud rate has dropped 64 percent — despite the fact that only a fraction of card-accepting merchants are set up for EMV transactions.

Jan. 25, 2016

Affinity Plus Federal Credit Union of Winona, Minnesota, a $1.7 billion financial institution serving 180,000 members, was among the first FIs in Minnesota to complete the EMV transition, issuing more than 59,000 new credit cards and nearly 118,000 debit cards, according to a press release.

And, the FCU said, its EMV effort seems to have paid off.

In the four months since completing its conversion to EMV chip credit and debit cards in October, fraud at Minnesota-based Affinity Plus Federal Credit Union has dropped nearly two-thirds (64 percent), a press release from the CU said.

Affinity said that it has experienced a 48 percent reduction in disputes in the September-through-December timeframe as well. The fraud reduction is especially significant considering the typical spike in fraud seen during the Christmas holiday shopping season, the CU pointed out.

"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 and 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."

The survey of 3,000 Affinity Plus EMV cardholders was carried out in December. Affinity Plus received completed surveys from 3,000 members in less than 10 days, Respondents rated the CU from one to 10 (10 being best) on its implementation of EMV chip card security:

How smooth was the Affinity Plus conversion to offering credit and debitcards with EMV chip technology? Score: 9.03
Do you feel that Affinity Plus takes member security seriously? Score: 9.59
Do you feel more secure knowing that EMV chip technology encrypts your personal card information when shopping at retail outlets that are equipped to accept this technology? Score: 8.24

However, according to Affinity Plus Director of Card Service, Nic Peterson, the number of merchants prepared to carry out EMV transactions is quite low — the CU's data shows that only 6.4 percent of debit card transactions and 11.9 percent 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.