Unparalleled Fraud Protection

As the payment landscape evolves and technology advances, criminals are finding it increasingly difficult to commit debit card fraud in Canada.

“Canada is a world leader in fraud reduction.”

Canadians have always taken pride in our reputation as one of the safest and most livable countries in the world. What people may not realize is that operating in Canada is one of the most secure payment networks in the world. With consumers choosing to use Interac debit more than any other payment card in their wallet, this is reassuring news for Canadians. According to a 2015 Nilson Report over 53 percent of purchase transactions nationally use Interac.

says Interac. “No “Canada Mark one Sullivan,is a has worldthe Head same leader of combinationin Fraud fraud Programs reduction,”of technol- ogy, programs, and protection systems that we have.” The numbers certainly back him up. Since the migration to chip technology began in 2009, Interac debit card fraud losses due to skimming have dropped 92 percent ($142 million reimbursed by financial institutions in 2009 versus a low of $11.8 million in 2015).

While there are a variety of reasons for these record low fraud numbers, the implementation of chip technology plays a critical role. EMV chip technology, which en-- ables debit enhancements like contactless payments, also provides consumers with protection from payment card skimming, counterfeiting, and electronic pickpocketing.

Robert Fodor, Chief Data Scientist and VP of Fraud for Interac, explains that one of the main reasons chip card technology is so significant to security is because unlike magnetic stripe, chip technology creates a digital conversation with a merchant’s terminal.

“The old magnetic stripe held static information that never changed. It could be intercepted by criminals and used to complete fraudulent transactions,” notes Fodor. “The chip on the other hand, provides dynamic information. Each interaction with a merchant’s terminal creates unique encrypted information that would be useless to criminals if intercepted.”

With the migration to chip technology in Canada, criminals seeking to commit fraud using magnetic

stripe data have to look to countries that are not chip enabled. “With 87 percent of Interac debit card fraud occurring outside of Canada and not on our network, we are doing a tremendous job of locking down the Canadian payments space and preventing criminals from committing fraud,” says Fodor.

Both Fodor and Sullivan underscore the importance of collaboration as another prime reason fraud is down in Canada. “In Canada we have world-leading collaboration between financial institutions, merchants, consumers, and law enforcement,” says Fodor. “By collaborating with industry experts, we’re able to monitor current trends in fraud, while applying best practices in order to advance the fight against fraud in Canada,” adds Sullivan.

Even though there are a number of strategies in place to mitigate fraud, Sullivan also highlights the importance of consumer education as a final fraud deterrent. “The more consumers are aware, the smarter they are about payment card safety. When fraud is reduced, we all benefit.”