Crooks stole $12.7 million at 1,400 Japanese ATMs earlier this month, with around 100 people making 14,000 transactions with 1,600 counterfeit credit cards based on stolen information from real cards issued by a South African bank.
The theft could have been avoided, a security expert said, if ATMs accepting the old-style, easy-to-copy magnetic stripe cards moved to two-factor authentication.
In many countries, the liability for magnetic-stripe card fraud has shifted from card issuers to merchants, helping push the payments industry towards EMV, or smart chip-based cards, which are significantly more secure.
But the pace of change varies greatly. The US, for example, just began its migration last fall.
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Asia also lags behind. As of last summer, EMV accounted for only 34 percent of transactions where the cards were physically present, compared to 84 percent in Africa, 87 percent in Canada, Latin America, and the Caribbean, and 97 percent in western Europe, reported EMVCo, the industry consortium that manages the EMV standard.
In fact, in China, India, Thailand and Japan, the liability shift won't happen until late 2017, according to NCR, a leading global ATM manufacturer.
When countries switch, card-present fraud drops dramatically, according to the Smart Card Alliance.
"But their experiences have also shown a migration to other types of fraud, namely card-not-present fraud and cross-border counterfeit fraud -- particularly ATM fraud," the organization reported.
And even after migration does begin, backwards compatibility with older magnetic stripe cards may still be required for customers with those cards.
A second factor, namely a phone-based confirmation, could help address this problem, said John Gunn, spokesman at VASCO Data Security.
"Massive stores of stolen card information is readily available on the dark web, but the cell phones of those card owners absolutely are not," he said. "If you have to have the card owner’s mobile device at the ATM at the time of withdrawal, you can virtually eliminate ATM fraud. Considering the number of people that sleep with their phones, expecting someone to have their phone at the ATM is more than reasonable."
Today, many websites already send a confirmation message to customer cellphones to confirm particularly risky transactions.
Gunn rejected speculation that the ATM fraud was successful because Japan is considered a "low risk" country by bank analytics systems.
"Japan has seen sharp increases in fraud in recent years," he said.
According to a report by Credit in Asia, credit card fraud in Japan increased 5.36 in 2015 compared to 2014, while in 2014, credit card fraud rose a whopping 45 percent.
Japan has a lot to offer criminals, Gunn added.
"Very few places in the world provide the perfect combination of high-density cities with many ATMs within a small area, great public transportation to get from ATM to ATM in the shortest time possible, and large numbers of ATMs that still rely on magnetic stripe cards," he said.