What Is Card Present Fraud? How Can It Be Prevented?

“What does ‘card present fraud’ mean? … How can it be prevented?”

I get asked these questions all the time and you likely have questions around it yourself. I’m hoping to clarify card present fraud for you — and shed light on how to put a stop to it.

Stay tuned for my next post. I’ll cover card NOT present fraud and what do to about it.

Card Present Fraud and EMV

Whether you realize it or not, the prevention of card present fraud is what we have been talking about for the past several months with the migration to EMV technology in the U.S.

EMV aims to prevent point-of-sale fraud, such as when someone buys an item with a counterfeit credit card at a physical retail store. EMV technology affects card present transactions only.

How does card present fraud happen? If you watch any news program, you’ve likely heard of a card skimmer. This is where criminals build a plastic cover that can be affixed over a legitimate card reader like an ATM. There are also mobile devices that can fit in the pocket of a person like a waiter or hotel clerk. In either case, it takes only seconds to capture the information held on the magnetic stripe of a non-EMV card. While your transaction goes through, the mag stripe on the back of a traditional credit card is read, data is captured, and in many cases, that data is instantaneously transmitted to a nearby fraudster.

EMV seeks to nullify the effectiveness of this type of fraud.

Data on a traditional magnetic stripe card is static — making it easy for card numbers to be skimmed and the production of counterfeit cards to be made.

The chip in your new EMV chip card, on the other hand, is state-of-the-art, and generates a UNIQUE one-time code that’s required in order for the transaction to be approved. This feature is virtually impossible to duplicate in a counterfeit card.

How to Prevent Card Present Fraud & Protect Your Business

The number one thing to do at this point is to upgrade to an EMV-enabled terminal.

Even if you don’t have a high transaction volume, you should upgrade. Some people we have talked to think they’re immune to card present fraud, and therefore don’t need to upgrade, just because they process few transactions a month.

That’s just not true. It’s a BIG RISK you’re taking by not upgrading even if you process a low amount of transactions.

When Europe transitioned to EMV, card present fraudsters began to target places that were slow to upgrade to new technology. It’s predicted the same will happen in the U.S.

Read more about that here in our article: Help! I Process Very Few Credit Card Transactions Each Month. Do I need to Worry About EMV?

Not only should you upgrade to an EMV terminal to prevent card present fraud, you should upgrade to protect yourself from having to shell out hundreds of thousands of dollars.

As of October 1st, under certain conditions, card issuers are no longer covering a merchant’s risk associated with transactions that result in fraud.

Why take the risk? If fraudulent charges occur when a chip card is used at your business, you’ll not only be liable for the costs of the transaction amount, you’ll have to cover any fines and penalties associated with the fraud and any damages that any party involved feels has been done to them — not to mention the financial damage that occurs as a result of the negative image your customers will have of your company after this experience.

For these reasons, it makes sense to upgrade to an EMV terminal right away.

If you’re not sure where to start when shopping for an EMV terminal, see our terminal solution set that includes terminals for every budget. You can buy or rent. Just give us a call at 888.244.2160 or drop us a line at and we’ll help you get the right terminals in place for your business.

Stay tuned for my next post where I’ll cover the other side of the coin — Card Not Present Fraud — and how to prevent it.

Rick Ellis is a Business Development Executive with over 20 years of experience running a successful membership-based company built around a lucrative recurring revenue business model. As an Executive for Constellation Payments, a fully integrated and proprietary payment gateway and merchant service provider, as well as for Member Solutions, a leading provider of full-service billing for enterprise businesses, Rick enjoys working through complex business models, and leveraging proven payment processing strategies for maximum effect.

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