30th September, 2020
Customer interactions – both at the offline and digital level – are evolving at a rapid pace. The blend of what customers are expecting and the ongoing COVID-19 pandemic are paving way for contactless payment interactions.
Amazon has come up with a contactless way, Amazon One, for people to use their palm to make everyday activities like paying at a store, presenting a loyalty card, entering a location like a stadium etc. The company is using custom-built algorithms and hardware to create a person’s unique palm signature. It is starting as an entry option at two of Amazon Go stores in Seattle.
The team at Amazon mentioned that palm recognition is considered more private than some biometric alternatives. One can’t ascertain a person’s identity by looking at an image of their palm. It also requires someone to make an intentional gesture by holding their palm over the device to use. Plus, in addition to being contactless, as Amazon asserts, counting on a palm as a biometric identifier puts shoppers in control of when and where they use the service.
Payment specialists have already focused on paying via voice, where one uses just their voice for instance, with Amazon Alexa and Amazon Pay.
How technology is shaping up at this juncture to support contactless or touchfree transactions?
Join experts and explore new trends in payments and fraud at Ai’s Airline & Travel Payment Summit - #ATPS Virtual Conference 2020:
20 - 22 Oct 2020
21st September, 2020
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 Travel
The coronavirus outbreak created havoc in the travel industry. Travellers understandably opted for refunds and also chose to reverse a transaction, not agreeing with a charge on their respective cards. Airlines have been and in the future, too, are going to be judged on the basis of the way they handle refunds.
“COVID-19 put all airlines under a severe stress test and accommodating so many customers for cancelled flights is not something that airlines could have envisioned prior to the pandemic,” acknowledged Tobias Wessels, Founder at Rebound Travel.
“Airlines offered to rebook customers which created a worldwide backlash, enormous frustration and lost in trust with airlines. The US DOT and the European Commission then stipulated that airlines have to pay their customers in cash for cancelled flights. While it is the right thing to do, those cash payments put even more stress on the already cash-strapped airlines. In the US more than $20b have to be paid back to customers in cash but the problem also exists in Europe. Lufthansa reported that they had to pay back more than EUR 2.5b to their customers. What has lacked in the industry so far has been an innovative and cooperative approach to manage the refund process during this pandemic,” Wessels told Ai’s Ritesh Gupta in an interview.
To salvage the situation and work on a prudent offering, Rebound Travel has initiated a refund management platform.
Through Rebound, airlines give customers that choice: customers with a pending refund can freely choose between their cash refund and attractive non-cash offers like vouchers, miles, BOGO offers, upgrades or shopping credit. “To motivate customers to choose an alternative to their refund, airlines offer a more attractive offer which could be a USD 2,400 travel voucher for a USD 2,000 refund. In some situations it is less important to offer "more" but the right options: a frequent flier that is 6,000 status-miles away from his or her next status sees more value in reaching the next status-tier immediately versus a flight voucher,” said Wessels.
“Rebound 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. We will announce our first partnerships here in the US and internationally very shortly,” shared Wessels.
He shared that the team consists of former airline executives. “It was important to us to offer a suite of solutions where everyone benefits including the traveller on a long-term basis.”
Transparency and Honesty
Several airlines changed their stance to adopt customer-friendly policies, whereas certain carriers didn’t and rather chose to only offer travel vouchers.
“It is great to see that the airlines are becoming more customer- focused in this crisis. Our approach at Rebound has been to involve the customers in the process and create value for airlines and travelers at the same time. Be fully transparent and honest in your process. Your customers understand that you are overwhelmed with the operational burden to process refunds. To encourage people to travel more it is important to regain trust and make it as easy and attractive as possible to fly again. Giving travellers a choice is a good first step, recommended Wessels.
“With Rebound, the airlines retain their cash and ensure that their customers return to them for future travel. That is especially important as your frequent flyers and front-of-the-cabin passengers account for the majority of an airline's profit. We also expanded our platform based on our partners' feedback to not only help during refund cases s but to retain cash in all situation when there is an expected cash-outflow like denied boarding,” he said.
Acknowledging that chargebacks are a long-term industry concern and have been very difficult, expensive and time-consuming to reduce for airlines, he said Rebound provides airlines a unique identifier of customers that choose the refund or one of the non-cash offers. That identifier is then used by airlines and presented to the credit card companies in what is called "representment". With the Rebound ID that validates the original credit card transaction of the customer, the airline significantly reduces or wipes-out the chargeback risk altogether.
As for the response, he said the industry feedback from partners in the US or organizations like IATA has been much better than expected. “We plan to announce our first partnerships very shortly and aim to help any airline to retain cash and strengthen loyalty with their customers. Other adjacent industries like cruises and attractions have shown interest in Rebound as well,” concluded Wessels.
Pitching Contest of Disruptors for the New Normal - Ai Events Virtual Lions Den
Join the Rebound executive team and other attendees from the industry on September 23rd 2020 as part of the session, “Disruptors for the New Normal”:
Interview with Erika White, Affirm’s Head of Communications and Corporate Marketing
1st September, 2020
Retailers, fintech and payment specialists are digging deep to understand how each generation of consumers is going about personal finances and overall finance management at this juncture. This is being done in order to evaluate what can trigger a buy, the chosen payment method etc. for various product categories. And considering that the travel industry has been hit hard merchants from this sector too must look at how all of this can play a part in reviving the situation.
The surge in “Buy Now Pay Later” (BNPL) option for transactions has stood out in the recent past, and travel retailers have already responded by activating the same on their digital assets.
Fintech specialists are expanding their operations across the globe, they are coming up with new products, going deeper into the lives of shoppers plus there are indications of consolidation, too.
Ai’s Ritesh Gupta spoke to Erika White, Affirm’s Head of Communications and Corporate Marketing, about consumer spending during the pandemic, evaluating risk associated with installment payments etc.
Ai: Can you explain how the spending habit has evolved in the last year or so, more so during the pandemic?
Erika White: Consumers are increasingly looking for more flexible, transparent ways to pay that help them manage their finances. A recent study from Ascent found that over a third of U.S. consumers have used a buy now, pay later service like Affirm.
And, our recent report about back to school shopping trends showed that pay over time is growing in popularity among parents -- 78% of the parents aware of pay over time solutions used one to buy at-home school supplies in spring 2020.
Ai: How does paying via credit card equate with using a debit card or option of installments?
Erika White: Affirm is a more simple, transparent, and consumer-friendly alternative to credit cards. We provide consumers payment flexibility, without a risk of hidden fees, at the point of sale. Consumers can split the total cost of their purchase, selecting repayment terms such as 3, 6, or 12 months, with interest as low as 0% APR. And Affirm never charges deferred interest or late fees so the number a consumer agrees to upfront never changes.
Ai: The pandemic has witnessed people losing jobs. How are you evaluating risks associated with people failing to make payments over a period of time?
Erika White: Affirm supports consumers by lending fairly and responsibly. Affirm doesn’t extend loans that we don’t believe can and will be repaid. We're able to do this through our home-grown proprietary credit scoring system that subverts the FICO monopoly and takes a greater quality and quantity of information into account, such as transaction history and credit usage. We use machine learning to make smart, ongoing adjustments to our credit models that enable people to spend in a way that’s responsible and wise.
Ai: What trends in payments would you like to highlight?
Erika White: Millennial and Gen Z consumers, having experienced the 2008 financial crisis and seeing credit card debt at an all-time high, are wary of traditional banking services and are opting for flexible payment options. Having grown up with subscription models like Netflix and Rent the Runway, these generations often prefer predictable monthly payments over traditional lines of credit, which can include deferred interest and hidden fees.
Ai: The travel industry has been hit hard this year. How do you think airlines and travel brands can associate themselves with BNPL or personal finance specialists to propel their recovery plans?
Erika White: Affirm is a great way for merchants to accelerate growth. Offering Affirm at check out drives overall sales, increasing average order value by 85%. Trusted by 5.6 million customers, Affirm approves on average 20% more customers than its competitors and 67% of its loans are from repeat customers. We’ve helped over 6,000 businesses, including Delta Vacations, Expedia, and Priceline, increase overall sales, reach new customers, and drive customer loyalty.
Ai: Affirm indicated that consumers have been saving their money during the pandemic and travel is expected to benefit once the consumer is ready to spend the same saved amount. Do you think by being there on personal finance apps, travel merchants can capitalize on the same?
Erika White: According to a survey conducted by Affirm, 40% of people who cancelled a trip this year, opted to save the money for the same trip in the future.
We believe that just as consumers look for flexibility in making travel plans, they expect the same flexibility in how they pay for those plans. Merchants partnering with Affirm are giving travelers the option to book now and pay over time, while never paying more than what they see up front, so they can feel more confident about their purchase. And by partnering with Affirm, merchants can reach our rapidly growing network of millions of customers.
Ai: What are your expansion plans? Any specific ones for the travel sector?
Erika White: We’re focused on best serving our customers and merchants in the travel sector and beyond and will continue to explore expanding the number and variety of merchants we serve.
Explore payment-related trends at the upcoming Airline Travel Payment Summit - ATPS Virtual Conference 2020
Date: 20 - 22 Oct 2020
25th August, 2020
21st August, 2020
Trading for stolen loyalty currency, data etc. on the dark web is quite similar to any online marketplace, with options varying from shopping categories to what’s available within various categories to the profile of the fraudster and criminal gang, and lot more.
The modus operandi is quite sophisticated and it is reflected in what and how fraudsters run their respective accounts.
“Fraudsters need to show they do legitimate business, sell authentic data and work on their reputation...even offer the option of refund,” mentioned Tobias Wieloch from Europol (European Cybercrime Centre or 3C), during Loyalty Security Association’s (LSA) webinar today. The fraudsters also stipulate refund and replacement policy. He added that the majority of attacks rely on existing modus operandi and benefit from known vulnerabilities.
Identification, Attribution and Data Enrichment
Wieloch also explained how the team works on its database, identifiers etc. to work on user matches and user duplication, and identify cybercriminals. Working with the private industry, the team also looks at attribution of losses and evaluates how the data has been fraudulently used, assesses sold compromised credit card or account details, and the financial damage per user. The team also looks at criminals’ details – user name, email address, IP Address + time stamp, login history, device details and phone number.
Wieloch also cited the case of Grant West, a hacker known as Courvoisier, who reportedly stole 78 million usernames and passwords to sell on the dark web with cyber attacks on Uber, Argos etc.
By Ritesh Gupta
11th Aug, 2020
A recent report by Checkout.com has indicated that merchants lose “over $20 billion due to false declines”.
While $12.7 billion of this figure goes to another merchant when a customer is turned away, it must to be noticed that false declines “are also making for a less efficient digital economy”. This is because “$7.6 billion of potential spending never came about as the shopper lost interest.
In the same report, a senior industry executive pointed out that re-visiting risk appetite is vital. Also, a “lot of sins can be hidden in the name of #fraud prevention, because fraud teams aren’t always incentivised to have a very rigorous statistical measure of false positives and false negatives”.
“Many companies just don’t want to get on the MasterCard and Visa chargeback programmes, and that’s the guiding principle. But I think where the real value lies is in getting more intelligent about where you set those lines and being very honest with yourself and very rigorous about what your risk appetite is, and knowing what your actual false positive and false negative rates are when it comes to fraud,” Andrew Row, Managing Director of Uber Payments has been quoted as saying in the report.
Travel ecommerce players are focused on garnering bookings and not going to initially care where a booking is coming from. They also need to better handle the issue of falsedeclines — legitimate orders that get rejected on suspicion of fraud.
It is imperative for airlines and others to evaluate their own fraud model and points of verification and authentication of the payment process.
To curb revenue leakage, travel companies must evaluate distinct behavior and risk, for instance, on each device, rather than applying one set of rules. Ekata asserts that rather than “strictly looking at definitive good or bad, it would be more effective to look at the probability of good or bad, so to adjust to the right tolerance level in letting transactions through”.
In fraud riskmanagement, as PayPal also points, it is vital to source info from a variety of sources, incl. real-time info to check authenticity of transactions.
Priceline, in conjunction with Forter, chose to rely on automated decision-making throughout the entire payment flow to work out an apt routing for a transaction to be approved.
Airline Travel Payment Summit - ATPS Virtual Conference
20 - 21 Oct 2020
The ATPS Virtual, co-hosted with UATP, is dedicated to the payments and fraudprevention strategies needed for airlines and travel-related businesses to survive.
7th Aug, 2020
15th July, 2020
The focus on streamlining payment-related aspects has strengthened over the past few months that mean more optionts to pay, efficient processes, lowering costs etc.
“Considering convenience and flexibility-related requirements and expectations of travelers moving forward a seamless refund process is going to be imperative, especially in the short-term as refunds continue,” highlighted Rachel Morowitz, UATP’s VP, Alternative Form of Payment, during Ai’s ATPS Webinar – Payment Strategy Roundtable. She also referred to continued innovation in areas such as virtual cards and contactless payments, for example at the airport.
Options such as “buy now, pay later”, too, are gaining traction.
The growth in installment payments has accelerated during the pandemic. The likes of airlines, hotels, OTAs etc. are considering this form of payment to be a key tool in their recovery, said Tom Botts, CCO, Uplift.
The option to pay in installments is a way to support and stimulate demand. The role of a partner like Uplift should be seen from a payment marketing specialist perspective and understanding of conversion, optimizing areas like check-out messaging, auto-updates as ancillaries are added etc., said Botts. In addition to the U. S. and Canada, the company is in the process of expanding operations to Latin America, allowing airlines to extend this payment option.
As for why Uplift stands out, Botts said, “Everything we do designed is to drive business results for our travel partners.” The offering is optimized for travel conversion. As for the processing, he said that at the time of paying for a transaction, if a customer opts for paying via installments, there is a sub-second credit check, and accordingly options are presented. Uplift settles with no changes to the existing flow, and no impact to payment processing or revenue accounting workflows.
During the webinar, it emerged that 82% of the attendees intend to accept more alternative form of payments (AFPs).
US-based #paymentech specialist and omni-channel acquirer Citcon’s Seth Friedman shared that the company is in the processing of facilitating 20 mobile wallets over the course of next 12 months. He mentioned that mechants, in addition to letting consumers pay via wallets, should also look at the demand stimulation prowess of an ecosystem like WeChat.
As for processing of payments and looking at efficiency while adding AFPs, airlines must evaluate aspects like integration, reconciliation, automation and global coverage.
By Ritesh Gupta
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1st July, 2020