Editor’s Note: Some information in this post appeared previously on Insight Vault.
The summer travel season is upon us, and for millions of Americans that means it’s time to pull out those credit cards. “Summer travel often translates into increased card usage,” says Amanda Atcheson, product marketing manager for CO-OP Financial Services. “But along with the opportunity to see the world comes greater opportunity for trouble. Not only do we see increased instances of lost and stolen cards, but we also like to caution members not to fall victim to online scams or poor security practices while they’re traveling.”
Improved Card Security Makes a Difference
To combat card-related fraud, the U.S. payment industry has made significant strides in adopting EMV technology as the new security standard for credit and debit cards. CO-OP’s EMV Common AID white paper describes this transition. Widely used globally, EMV chip cards are quickly making their way into the hands of U.S. consumers, and merchants are upgrading to new terminal platforms equipped with EMV card readers to facilitate the technology. Members traveling abroad will appreciate having EMV chip technology, which is the standard in many foreign countries. Consumers here and abroad can also expect broader support for near field communication (NFC) and tokenization technologies, which together enable and secure new contactless payment options such as Apple Pay and Android Pay.
“Security technologies such as EMV and tokenization can dramatically reduce exposure to card fraud,” said Atcheson. “EMV chips make it virtually impossible for fraudsters to create counterfeit cards. Tokenization used in Apple Pay and other digital wallets encrypts a consumer’s card number so fraudsters cannot access it. Cardholders just need to know about the benefits of these advanced technologies – and they need to use them when checking out.” EMV cards have the added benefit of being compatible with payment systems abroad.
Credit unions can help their members, Atcheson says, first by making advanced fraud-prevention tools available to members, and then by educating them on how to install and use them.
“Credit unions should also encourage consumers to take security into their own hands by monitoring their transactions and reporting any suspected fraud immediately,” she says.
Using Data Analytics to Fight Fraud
Behind the scenes, Atcheson advises credit unions to also closely monitor member transactions using preventative analytics tools. “Data analytics can be extremely effective at identifying anomalies in a member’s card usage and uncovering potential points of compromise,” she said. “Having analytics in place can make a big difference in securing member accounts and avoiding service disruption while members are away from home. Plus, these tools pay for themselves quickly by minimizing credit union losses due to fraud.”
She continues: “As fintech continues to redefine how payments are made, and new players such as SnapChat, Facebook and Venmo continue to enter the P2P payments market, consumers need to be even more vigilant in protecting their account information. For example, they should know that it is much safer to use a person-to-person payment solution offered through their credit union than to submit payments through social media sites or other venues of questionable origin.
Five Tips Members Might Overlook
Travel advice abounds, but here are five cash- and card-carrying tips your members might not yet have in mind as they embark on their travels:
- Choose ATMs carefully. Some airports abroad are contracting with currency exchange companies for ATM services. These ATMs are labeled “no-fee,” but users pay for transactions through unfavorable exchange rates, which can run as high as 10 percent of the transaction.
- Use a phone, not public wi-fi, and your credit union’s dedicated mobile app to check account balances, pay bills, or make purchases. Shared wi-fi – including wi-fi in your hotel room — is not secure.
- Credit is better than debit for many travel transactions. Travel perks such as late check-out at your hotel or rental car protection may apply – as may rewards points if you’re making big purchases like plane tickets or hotel stays.
- All EMV is not created equal. Before heading out of the country, it’s worth checking with card issuers to find out whether EMV cards will be compatible with chip-and-PIN technology. If chip cards have yet to be issued, this is a good time to find out about prepaid options.
- Mobile card controls enhance security. New smartphone apps such as CardNav by CO-OP allow travelers to set up controls for card usage, receive real-time alerts when unapproved transactions occur, and even temporarily disable their own cards if needed – for instance, if a card is stolen or lost while traveling.
Providing advanced security tools and educating travelers on safe tactics is an important way to secure strong relationships with your members. Added bonus: The security practices you share often work at home as well as on the road.