Card skimming is still a problem in the United States because the victims refuse to take medicines that have long proven safe and effective. Do that, and the pain goes away.

But too many fail to heed common sense. According to FICO, in 2023, the number of cards impacted jumped 77% YoY from 70,000 cards in 2022 to close to 120,000 in the first half of 2023. The FBI estimated card skimming costs financial institutions and consumers more than $1 billion each year.

FICO’s numbers sure catch the eye. In the first half of 2022, the YoY increase in compromise events exploded by 759%, up from “only” 548% in Q1. There was also a five-fold increase in the number of cards detected.

The most concentrated population centers draw the most interest. More than half of card skimming occurs in California, with 23% occurring in New York, Pennsylvania and Maryland. More than 60% (63) happened at a single convenience store brand, more than triple the 20% at a branch ATM.

How education can eradicate card skimming

Some experts will suggest deploying strategies like two-factor authentication or one of the dozens of technologies on the floor at an industry convention. Chargeback Gurus COO Rodrigo Figueroa believes the best solution is much simpler.

Education is critical, whether it be with customer-facing employees or convincing the C-suite types of a change in strategy. Some companies with strong technologies still get victimized because some employees still direct customers to swipe their cards. That’s when the fraud occurs. Chips are highly secure.

The C-suite conversations are more nuanced. Each business has an accepted level of loss. Executives can accept card skimming rates in the low single digits. Most are more concerned with other attack vectors.

Be proactive, deliberate

Keep up with the Joneses, and you’ll be fine, Figueroa advises. Like anywhere else, card skimmers look for the easiest in. Introduce and maintain a dedicated and secure chip usage strategy, and you are okay.

“If you read the reports, it’s still incredibly secure, the technology itself,” Figueroa said. “The technology is still unbreakable.”

Good companies employ a person-centric approach that begins with the design process. Figueroa said they consider the journey from when the customer enters the store or website. What are they like? What are their preferences? 

What data are you collecting? How are you using it?

Then, you have to be deliberate about how they take that to the board. Be clear on the benefits of your process compared to the existing one. Plainly explain the trade-off. Show how this makes you better.

“If you do this, you should do the right investments,” Figueroa explained. “If you build the governance in a way that you increase the experience, you enhance the experience, and you lower the cost, no co-founder is going to say no.

“The truth is a lot of companies are doing amazing risk management. They are not looking for the latest and greatest shiny object after that. So it goes back to the people, investing in good strategy people that can see that vision.”

Boil it down, and it comes to having some foresight, then implementing and maintaining a sound strategy.

“If you are lagging behind your competitors, if you’re lagging in your industry, eventually you will become a target,” Figueroa concluded.