Evaluating potential of PSD2 and SCA – 5 tips for success

25th November, 2020 

Ekata has identified five markers of success that could also help entities unlock the potential of PSD2 SCA, be it for a provider or a merchant.

In its latest study, the company asserted that the “security enhancements provisioned under PSD2, such as SCA, quickly become more than a legal protection checkbox – they are a matter of vital strategic importance to the bottom line of any organization”.

The markers that also differentiate leaders from the rest of the pack are:

  1. Consistent and clear communication
  1. Identify priorities for merchants: It is paramount that PSPs and acquirers alike understand the pressure that merchants are under in this climate. Merchants must be made aware of the minimum actions needed to take to ensure SCA can be applied and out-of-scope transitions with a lot of nuances, most notably MITs, so that they can submit with the right flags to ensure they do not get declined. Also, help them with more sophisticated transaction rescreening take full advantage of the acquirer TRA exemption.
  1. Build tools and recognise data importance: The better the TRA models that PSPs are able to implement, the better exemption rates their merchants may be able to get.
  1. Understand issuer behavior: Given a central feature of 3DS2 is the ability for merchants to share more data with issuers, this allows issuers to make more informed authentication decisions. Ekata highlighted that the issuer behaviour varies depending on size and geographical location. They also appreciate that issuer response will change over time as operations are refined in the lead up to SCA implementation. Understanding issuers’ overall risk thresholds and their associated behaviours is a reliable way to stand out and stay ahead.
  1. Pay attention to the little guys: Given the top 20 merchants in Europe have less than 20% of the eCommerce market, the small and medium merchants are where acquirers and PSPs should be focusing their attention.

The study featured over 36 PSPs and acquirers who represent over 60% of European card-not-present (CNP) volume.

By Ai Team 

 

 

Avoiding illegitimate access to data asset - 5 key areas

23rd November, 2020

A number of organizations have fallen short of keeping their data secure even though they believe that they have a defense mechanism in place to protect their information and systems. But any breach or illegitimate access to data is a big blow considering that teams are working remotely.

Capabilities of hackers/ scammers continue to get more sophisticated and it is vital to for organizations to identify any unusual behavior before a databreach happens.

Some of the pertinent areas that need to be focused on are:

  • Ensure there is clarity over what to protect and where.
  • One cannot misuse data or leak if there is no access. “So either limit access by default or control the size of the potential leak,” says Jan Kubíček, Kiwi.com’s Director of Security. Do evaluate if there is any data stored in an unsecured external storage service. If it accessed without authorization then it’s a threat.
  • Focus on real-time threat intelligence. This can help in evaluating behaviour which otherwise can be missed by traditional endpoint security technology, according to Daniel Farr, Leading Information Security Consultant, Foregenix
  • Unpatched or old vulnerabilities shouldn’t be overlooked at any cost, said Kubíček.
  • Encourage a culture of security within an entity. Do focus on security awareness and training alongside technical controls.

By Ritesh Gupta

Ai Team 

 

#CoBrand, 2020 – Focus on proposition relevance to sustain cobrand spending

10th November, 2020

“Keep talking, keep innovating” – this is what Kate Morgan, Head of International Partnerships, Auriemma Group recommended to those who are managing co-brand and loyalty initiatives, stressing on the significance of maintaining the existing credit card customer base in today’s environment.  

“Good news from our research – existing customers are still spending across verticals,” said Kate during Ai’s Co-brand & Travel Reward Cards Virtual Conference 2020.

Ref. to UK Finance’s recent figures, Kate shared that debit card spending in the UK reached a record high of £59.1 billion in July. Credit card spending has recovered slightly but continues to be impacted by ongoing economic uncertainty.

As for why consumers haven’t been using credit cards over the past month or so, Auriemma Group’s consumer research indicated that 69% prefer using debit cards and 46% mentioned that credit card is for “emergencies”.

“Very little behavior seems to be driven by the financial aspects of the credit card (for instance, interest rates, credit limit etc.),” said Kate. Outstanding balances on credit card accounts have contracted by 13% over 12 months to July, as a result of repayments outstripping new borrowing in the year.

Even as managing of co-brand and loyalty initiatives has become challenging, the focus must be on maintaining the existing customer base.

Also, referring to Auriemma’s recent research on cobrand spending patterns in the U. S., she said 54% of consumers used co-branded credit card for purchases outside the associated brand.

“Loyalty is a long-term play,” said Kate. She emphasized that airline and hotel redemptions are typically large-ticket items, which take time to accrue. Companies must evaluate:   

  • How confident are you in your customer retention program?
  • How have you managed to offer relevant rewards over the past few months?
  • Is there any incentive to spend on new categories?
  • What commercial partnerships are in the pipeline to support this?

Kate referred to certain offers/ initiatives resulting in more frequent use of cards. The list included discount delivery on food orders, increased cashback rewards in certain category, extended sign-up bonuses etc. are examples of the same. 

Kate also referred to few noticeable developments.  American Express has chosen to extend the period by additional three months (doubled it) to allow one to make eligible purchases to earn welcome bonus for certain cards issued earlier this year. In India, Amazon Pay and ICICI Bank have just shared that their credit card has become the fastest in the country to cross the milestone of one million, in less than 20 months of its launch. Highlights include issuance of reward points directly into Amazon Pay balance and contactless feature embedded in all cards.

By Ritesh Gupta

Ai  Team

 

Striving for a stress-free customer journey

6th November, 2020

The travel sector is going through its toughest balancing act – staying afloat with less. Every penny has to be meticulously spent, contribute to the much-needed cashflow.  And most importantly, every stakeholder is looking to play a bigger role than ever, foraying into unchartered territories to ensure the demand is captured in the best possible manner.

Even as senior travel industry executives, for instance, Travelport’s CEO Greg Webb recommend rapid, accurate testing at airports as a feasible alternative to maintain traveler safety, it is imperative for travel brands to be open and up-dated about every aspect of a trip.

It is not what travel providers usually focus on, even though it is a part of the services they need to provide, acknowledges Manuel Hilty, CEO, Nezasa. “You don’t need to know everything on your own, you just need to build a solid partnership and network of expertise,” he says.

As for what products to offer in order to match expectations of a consumer, Plusgrade 2020 Survey underlined that travelers intend to “travel better” and are showing signs of paying a premium. A seat-blocker is not a “COVID product”, highlighted Pramod Jain, COO, Plusgrade.  

New initiatives are coming along - Airasia.com’s travel vertical has been expanded to encompass non-AirAsia flights; Wizz Air’s mobile app has added ground mobility services for both pre-booking and on-demand requests. The airline launched this mobility platform with CarTrawler.

“This emphasis on the customer will help rebuild the travel sector and offer strong foundations on which we can all grow and thrive,” said Aileen McCormack, Chief Commercial Officer at CarTrawler.

 

COVID-19 tipped to drive investment in payments space

4th November, 2020

Payment specialists are taking vital initiatives to meet merchants’ local and global needs by strengthening their competency across a spate of key areas including digital payment capabilities, cybersecurity and fraud prevention.  

This week Worldline has welcomed Ingenico . The group has expanded the coverage of its payment value chain and its expertise in cross-border acquiring with Ingenico’s global exposure to online commerce.

 

Also, Nuvei has completed the previously announced acquisition of Smart2Pay Global Services to expand its  geographic footprint.

COVID-19 is being tipped to remain an active driver for investment, particularly in the fintech segment.

All this means that specialists are gearing up to support merchants in several areas - transaction routing, authorisation rates and the ability to roll out new payment methods quickly and seamlessly.

Last year witnessed a couple of mega-mergers in this arena. One was the US$42.5b acquisition of WorldPay by FIS. And the other one was the US$22 billion acquisition of First Data by Fiserv.

 

Dealing with old and new risks that trigger a data breach

28th October, 2020

How vulnerable is your critical data? How to respond to a data breach?

Organizations must delve into new risks and repercussions of a data breach with insecure home networks and strained security resources.

Fraud prevention specialists should take note of not only financial aspects, but also associated “soft costs” or hidden cost of data breaches, asserted  Tom Madden, Sr Partner Client Succes + Growth, ICFNext, and Matt Silverman, Sr Partner Corporate Communications and Brand Strategy, ICFNext during the LSA Fall Virtual Conference 2020.

 

A data breach results in a sweeping impact, bringing about not only financial losses but also damages reputation, decreased trust and changed perceptions of organizational strength.

Silverman explained that reputation issues shouldn’t be overlooked. Customers want to feel safe, and since fraud is growing, the probability of an organization’s data assets getting stolen should be brought down.

“Planning is critical,” said Madden.

It is vital for loyalty executives to assess – are they ready to deal with a breach? When it comes to security and transparency – how to communicate? In case a data breach happens, then what to share and what not to share? Timing of communication – within a day or a week? 

“All of this and more has to be a part of a thoughtful decision-making, it can’t be spontaneous,” said Silverman.

Focus on limiting access to data 

Data security isn’t a “set it and forget it” exercise and an ongoing effort is need to address threats to data privacy, data leakage etc.

Experts highlight that within a company,  one cannot misuse or leak what they don’t have access to. So either limit access by default or control the size of the potential leak.

By Ritesh Gupta

Ai Team 

 

“Consumers want to feel secure”: Comarch

27th October, 2020

The significance of consumers feeling secure about their data, including personal information, and all other critical aspects of an individual’s association with a brand, for instance, their garnered loyalty currency,  shouldn’t be undermined.

Almost 85% of consumers “are more loyal to companies that have strong security controls”, highlighted Bindu Gupta, Loyalty & Marketing Strategist, Comarch, Inc during the inaugural session of the LSA Fall Virtual Conference 2020 today. “Consumer loyalty to a brand is at a high risk. Brands cannot take loyalty for granted,” mentioned Bindu.

 

An attack on an entity’s data asset resulting in a breach or on a loyalty program is a big blow, more so at this juncture when teams are working remotely.

Bindu explained that loyalty is more than a rewards program. Trust is what brands must focus on and once this is established, it eventually results in  more transactions (92% more likely to buy additional products and services). Also, “experience” offered too tends to make a huge difference. She also emphasized on the human element of customer experience. Three-fourth of customers tend to be interested in interacting with a human versus an automated machine. “Human connections are needed even more now,” said Bindu. She also mentioned that brands need to personalize the entire earn and rewards experience.  

By Ritesh Gupta

Ai Team

 

#ATPS , Day 3 – 5 major takeaways for payment and fraud prevention specialists

23rd October, 2020

Bringing in more revenue, cutting down on expenditure, not falling prey to fraudsters’ tactics, improving processes and keeping pace with the regulatory requirements…airlines and travel merchants' goals haven’t changed but tactics must evolve in a significant way from here on.

A thorough discussion around a number of topics at the just concluded #ATPS Virtual Conference 2020 made it clear that merchants need to respond, as they attempt to “do more with less”. Some key lessons from Day 3:

  1. Simplify experience for travel shoppers:  On the final day of the three-day conference, Chris Fendley, Executive Vice President, Mastercard referred to the significance of a seamless transaction. He said the whole premise of Secure Remote Commerce or SRC is to make paying more seamless for consumers.  Rather than flooding shoppers with a myriad of different checkout scenarios and options, it is about making them do less in order ensure a smooth checkout. As Keith Wilson, Director -Strategic Merchant Relations at Discover, highlighted, SRC gives every merchant “the ability to offer the Amazon experience”.

Travel merchants are looking at rolling out new payment methods quickly and seamlessly as they assess ways to support immediate recovery. Increasing the number of payment methods emerged as the top priority (43%), as indicated by the audience during a poll conducted during #ATPS Pre-event Workshop on Alternative Forms of Payment.

  1. Being open and honest: Just the way Monica Eaton-Cardone, COO, Chargebacks911 emphasised that it is imperative to maintain open and honest communication with customers regarding any delays or answering their queries, Matthew Dugger, Merchant Relations Manager Asia Pacific, Ethoca mentioned that by being in touch with customers and hearing them out, travelers too can become considerate and the interactions can result in positive stories. And this can lead to more revenue via an upgrade or ancillary sale.

Adnan Beig, Head of Airlines Strategy, Amadeus  acknowledged that the trust issue must be delved into, and flexibility is going to be imperative going forward.

  1. Count on data for various metrics: Merchants must evaluate whether they are receiving any actionable analytics, making the most of their payments data. Merchants can’t afford to ignore this aspect. For instance, one must evaluate how their authorization and chargeback rates compare to the rest of the industry. The filtering options help in assessing key performance metrics such as authorization rates, chargeback rates, refund rates, ATV, rejection reasons, drop-off rates etc. From a shopper’s perspective, insights from payments data should result in tailored exp. A merchant can be so targeted that no two customer journeys need look the same.

  2. Being nimble with fraud prevention: Fraud prevention specialists are delving into what sort of novel buying patterns are emerging as they look to foil fraudsters’ plans for fraudulent transactions. The time of the day when transactions are being conducted is changing as consumers have been working from home. Also, more people are making e-commerce buys on behalf of others, according to Vipin Surelia, Head of Risk, India & South Asia, Visa. This is also resulting in a shift in fraud pattern, added Surelia. “Phishing scams are becoming increasingly common.” As for curbing online fraud, machine learning’s role in fraud detection can’t be undermined but it shouldn’t be forgotten that it takes time to recalibrate. A human fraud analyst can take charge and control the situation, ensuring a genuine shopper’s experience isn’t hampered.

Michael Gulliver, Global Payments Manager, Webjet mentioned that fraud can be kept under the desired level. The blend of right data and right people is going to be paramount. He also shared that credit vouchers can be accepted, although for the same the regulatory aspect in a specific market also comes into the picture. 

5. Collaboration: The role of various stakeholders was discussed in detail in the last session. It featured executives from Amadeus, including Adnan Beig, Klein Wang, Regional Head of Merchant Solutions, Asia Pacific, Amadeus, and Alessandro Monge, Payment Product Management, Amadeus. Wang mentioned that her team has been in regular touch with companies, conducting workshops and seeking feedback on an ongoing basis, with focus on automation and aiding airlines in improving the cash flow.

 

Monge spoke about the importance of PSD2 SCA in curbing fraud. The industry on the whole seems to be far from being fully prepared, but he said, “there is no way out, we must respect SCA (as an industry).”

 

By Ritesh Gupta

Ai Team

 

#ATPS, Day 1 – Crafting an astute payment strategy for immediate recovery

21st October, 2020

Travel merchants are closely evaluating the impact of the pandemic on several counts, and one of the key areas is related to working out a balanced payment strategy.

In order to work out the same, airlines not only must shape up a frictionless booking path for a better conversion rate but also need to evaluate how they can bring the cost of a transaction down, as they attempt to make the most of the situation. The top priority in terms of payment strategy post Covid19, as highlighted by Yuval Ziv, MD – Digital Payments, Nuvei, during the inaugural session of the #ATPS Virtual Conf. 2020, is to protect cash flow, and for the same airlines can focus on attractive non-cash offers.  Referring to findings from a recent study, he said around 44% of those interviewed from the travel industry have indicated the same. Other aspects were as follows: reduce payment costs (25%), garner additional revenue (17%) and protect existing revenue i. e. to prevent fraud (15%).

Edgar, Dunn and Company’s Pascal Burg referred to the significance of payments data analytics and regular discussion with payment partners. 

In the second session, Payment Universe’s Marco Conte mentioned that scammers haven’t spared any opportunity to create havoc. “Internal communication (sharing information between teams) and process improvements are needed,” he said. Plus, Conte also stressed on setting up an apt multi-acquiring set up and learning from the new normal by counting on refund and chargeback available data.

Support immediate recovery

CellPoint Digital’s CEO Kristian Gjerding spoke about the significance of payment orchestration. As for how it supports immediate recovery, the company asserted that such move would allow airlines to quickly add the payment methods customers prefer in each market during the checkout process, reducing cart abandonment and maximizing conversions. On the processing side, payment orchestration reduces the cost per payment transaction by dynamically routing payments to local acquirers to reduce cross-border traffic (and fees). Just a few percentage points improvement on an airline's conversion rate, authorisation rate, chargeback win-rate will make a huge impact on their operating margin. Payment orchestration helps them achieve that, so that's what they should focus on.

From an airline’s persective, Scott DeAngelo, EVP and CMO, Allegiant, mentioned that options like being flexible with payment or paying them in installments is a great way to boost the conversion rate. He said the installment payment offering fitted like a glove considering Allegiant’s strategic focus. As for embracing such payment option, DeAngelo referred to the significance of making travel affordable and accessible, and also the same playing a role in not just selling an airline seat, but also other aspects of travel including a hotel accommodation, car rental etc. So buy now pay later (BNPL) has a role to play in stepping up the average order value, be it via addition of an air ancillary or a non-air ancillary. Uplift’s VP-Commercial, Chris Stacey shared that his company, as specialist in BNPL and being 100%-focused on travel, has been counting on data and focusing on customer-friendly policies to offer a relevant payment product and approving more customers.

Handling chargebacks

In a session about the handling of chargebacks and how to ensure customers don’t end up going to issuers, Monica Eaton-Cardone, COO, Chargebacks911 emphasised that it is imperative to maintain open and honest communication with customers regarding any delays or answering their queries. This can help in strengthening ties with customers, as the company shows the customer that it is aware of the situation. “Setting expectations proactively reduces chargebacks,” said Monica.

“Lack of information results in customers behaving badly,” she said. According to her, refund isn’t the only satisfactory answer.

Congrats Rebound Travel!

Rebound Travel emerged as the winner of Ai’s Lion’s Den Pitching Contest of new and innovative Payments and Fraud Prevention Solutions, held as a part of the conference.

The company won The Best Pitch award (Audience Poll) as well as bagged the Best Product award (Judges' Verdict).

 

The contest featured great presentations from three companies - Rebound Technologies, SecuredTouch and Pennies.

"What has lacked in the airline industry so far has been an innovative and cooperative approach to manage the refund process during this pandemic, according to Tobias Wessels, Founder at Rebound. The company provides the intelligence so that airlines offer the optimal offer type and value that motivates customers to choose an alternative offer to their refund while keeping the airline's opportunity cost as low as possible.

 

Stay tuned for Day 2 of #ATPS - https://lnkd.in/dHqfzvZ

By Ritesh Gupta

Ai Team

 

#ATPS, Day 2 – Formulating payment and fraud strategies from here on

Secure remote commerce, chargeback management, lowering losses from false positives…a number of pertinent issues were discussed on the second day of ATPS Virtual Conference 2020.

22nd October, 2020

Travel merchants, including airlines, are understandably prioritizing projects that can contribute to their immediate recovery. As for supporting interactions and payment methods that are touchless or contactless, airlines are starting to respond to the same, though the pace of the same can’t be compared with some of the other verticals.

Speaking on the second day of #ATPS, Keith Wilson, Director Of Strategic Merchant Relations at Discover, acknowledged that contactless payment option has been around for 12-18 months or so in the U. S. “…(it has) been proliferating fairly quickly. (It) really ramped up because in the grocery stores and other places that you would go to - not having to touch things is definitely a huge benefit. We haven't seen a lot of movement in travel. Of course, in the travel industry, there is a lot of ticketing and reservation systems that would involve massive changes.” It still hasn’t turned out to be a huge priority yet, but as Wilson mentioned, one airline has started to implement and contactless EMV for onboard sales and several other airlines are investigating as well.

Wilson also referred to the adoption of secure remote commerce or SRC.

SRC specifications pave way for a consistent UX for shoppers and overall simplified checkout experience. This way a consumer doesn’t need to re-enter information on websites that support SRC, thereby speeding up checkout time and reducing abandonment. No need to create an account. A user who enrolls in SRC and chose to have their device remembered will checkout as a guest on a merchant website they have not visited before.

Amidst signs of recovery don’t ignore the threat of fraud

In terms of recovery, there was reference to The Transportation Security Administration (TSA) screening over 1 million passengers last Sunday. This meant that highest number of passengers  were screened at TSA checkpoints since March 17 this year. Also, the weekly volume of 6.1 million, marked  the highest weekly volume for TSA since the start of the COVID-19 pandemic.

At the same time fraudsters haven’t stopped targeting the travel industry even though the sector has suffered immensely over the last six months or so. Rather than waiting for bookings to pick up, it is imperative for travel merchants to find way to “understand users to avoid losing legitimate travel shoppers”,  according to Hubert Rachwalski, CEO, Nethone.

Merchants shouldn’t rely only on historical transactional data, but as Rachwalski recommended, also take into consideration device info (spoofing detection, virtual machine detection etc.), network info (TOR detection, IP geo-location etc.) and behavioural info (e. g. mouse movement). Speaking at the #ATPS, he added that it is critical for any airline to lower the losses from false positives. “Evaluate the traffic in the background and pave way for a frictionless experience to shoppers,” he said.

One of the metrics Nethone uses to support the fact fraudsters are targeting the travel sector - is % of transaction attempts with signals triggered, i.e. 'Virtual Machine', 'Tor Network' and 60 others. And even though COVID-19 has caused the transaction volumes to drop sharply, the traffic with signals has almost doubled.

Looking at the future in a pragmatic way

Shazad Iqbal, Former Senior Payments Consultant (Commercial), British Airways referred to the significance of collaboration among various stakeholders, especially for data, for instance, in-depth analysis of transactions. Also, it is imperative to win back the confidence of travelers via transparent policies and initiatives. Motie Bring, CCO, Nuvei  also acknowledged that airlines can look at their “systems and partnerships” to let travellers pay in the manner which makes them feel most secure and confident about their transaction.

In the same session, Fernando Souza, VP Global Travel & Transit Solutions, Cybersource referred to the rise in touchless payment experiences, for instance, the use of public transportation services are increasingly facilitating such options. “We are seeing reduction in personnel  in the fraud management department,” added Souza, who added that airlines still need to improve automation of refund process. 

Alex Zeltcer, CEO & Co Founder, nSure.ai highlighted that the industry is going to witness last minute transactions. In this context, can airlines avail a chargeback guarantee offering, that takes on the liability for any fraudulent transactions? Zeltcer also highlighted that fraudsters can continue to break through rules in fraud systems, and the role of data and machine learning is going to be critical.

Amine Boulaghmen, Head of Payment Facilitation Solutions, IATA shared that airlines have to respond to digitalization, for instance, acting as retailers to offer a superlative experience. Also, since carriers have been left with no choice but to respond to changes in consumer behavior and cash flow-related considerations, payment-related processes are being addressed and improved. 

On the B2B payments side, the volatility, as expected, made the situation precarious for acquirers. How to understand all of the unique risks posed by airlines? A travel merchant might go out of business without delivering the bought service.

Brett Turner, Head of Global Airline Acquiring, SVP, Elavon highlighted the role of data. It is key to understanding contingent liability risk. “Help in understanding all moving parts like refund, vouchers etc. in overall tracking and managing of risk,” he said.

B2B travel payment options

In a session about how the relationship between airlines and travel agencies is evolving and is expected to shape up, Livia Vite, Head of Airline Partnerships, eNett highlighted that recovery initiatives post-COVID19 pandemic is going to result in a unique opportunity for both the stakeholders to work on a  B2B travel payments approach to benefit all in the travel value chain. “With all the risks and costs to the travel distribution landscape magnified post-COVID, both airlines and agents are now very aware of payment risks,” said Livia.

Delving deep into what each of the stakeholder needs to introspect, she referred to various aspects of retail model from an agency’s perspective. For instance, in case agents decided not to become a merchant then are travel shoppers going to comfortable with multiple transactions appearing on their card statements? How would the agent compete against agencies using the retailer model?

For their part, airlines must re-visit how travel agencies help them to expand their reach in terms of their role in facilitating access to away markets, and catering for local payment preferences in these markets.

“Many airlines and agents are using this opportunity to rethink their payment and/or distribution strategies and to start the conversation,” mentioned Livia.

This topic was also discussed in the final session of the day featuring Pascal Burg, Director, Edgar Dunn & Company; Stephane Druet, SVP, Head of Product and Marketing, CellPoint Digital; and Christophe Kato, Assistant Director, IATA.

Druet also spoke about cutting down on the overall cost per payment transaction by dynamically routing payments to local acquirers to reduce cross-border traffic (and fees). The panelists also spoke about payment orchestration and the importance of automating back-end processes like settlement and reconciliation and incorporate fraud rules and regulatory compliance, all of which reduce chargebacks and fraud.

 

By Ritesh Gupta

Ai Team