Visa Fuel Segment Update

Transcription

1 Visa Fuel Segment Update NPECA Annual Conference April 15, 2018 Robert Alandt Senior Business Leader Merchant Sales and Solutions, Visa Inc.

2 Agenda Fuel Segment Fraud and Chargeback Trends EMV Update Acceptance Initiatives Review Case studies, statistics, research and recommendations are provided AS IS and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. does not make any warranty or representation as to the completeness or accuracy of the information within this document, nor assume any liability or responsibility that may result from reliance on such Information. The Information contained herein is not intended as legal advice, and readers are encouraged to seek the advice of a competent legal professional where such advice is required. 2 NPECA Fuel Segment Update April 15, 2018

3 Fuel Segment Fraud and Chargeback Trends 3 NPECA Fuel Segment Update April 15, 2018

4 Service Station 5541 Reported Fraud & Fraud Chargeback Trends Source: VisaNet 4 NPECA Fuel Segment Update April 15, 2018

5 Service Station 5541 PIN Magstripe Transaction Counterfeit Fraud Source: VisaNet 5 NPECA Fuel Segment Update April 15, 2018

6 Service Station 5541 Counterfeit Fraud By State 12% 10% 9% 7% 5% 5% 5% 5% 3% 3% Source: VisaNet for the period Q through Q NPECA Fuel Segment Update April 15, 2018

7 AFD 5542 Reported Fraud & Fraud Chargeback Trends Source: VisaNet 7 NPECA Fuel Segment Update April 15, 2018

8 AFD 5542 PIN Magstripe Transaction Counterfeit Fraud Source: VisaNet 8 NPECA Fuel Segment Update April 15, 2018

9 AFD 5542 Counterfeit Fraud By State 41% 14% 12% 3% 3% 2% 2% 2% 2% 2% Source: VisaNet for the period Q through Q NPECA Fuel Segment Update April 15, 2018

10 AFD 5542 Lost/Stolen Fraud By State 21% 19% 10% 4% 3% 3% 3% 3% 2% 2% Source: VisaNet for the period Q through Q NPECA Fuel Segment Update April 15, 2018

11 AFD Fraud Monitoring Program Key program attributes: Applies only to U.S. domestic transactions at AFDs Identification at the merchant location/outlet level Program will review the previous calendar month s domestic counterfeit fraud dollar totals and the domestic counterfeit fraud-to-sales ratio Two program thresholds Standard Program - monthly basis thresholds met or exceeded $10K in domestic counterfeit fraud, and 0.20% domestic counterfeit fraud amount to domestic sales ratio Excessive Program monthly basis thresholds met or exceeded $10K in domestic counterfeit fraud, and 2.00% domestic counterfeit fraud amount to domestic sales ratio Remediation considered successful if below at least 1 threshold for 3 consecutive months Any U.S. AFD merchant outlet that re-enters the program within 12 months of completing remediation will automatically escalate to the Excessive Program timeline Program will end October NPECA Fuel Segment Update April 15, 2018

12 Visa Transaction Advisor (VTA) General status: AFD: 27 fuel brands with more than 83K locations active: ~62% of Visa non-pin AFD txns participating Inside: 23 fuel brands with more than 58K locations active ~58% of Visa non-pin inside txns participating Brands using/testing the service include: Source: VisaNet data as of Jan 11, NPECA Fuel Segment Update April 15, 2018 All third-party brand names and logos used in this presentation are the property of their owners and are used for identification purposes only without endorsement.

13 Issuer Fraud Reporting Accuracy Actions to Address Monthly report of issuer reported AFD lost/stolen fraud Total Amount Ratio of lost lost/stolen fraud to counterfeit fraud Issuers are identified with monthly lost/stolen fraud and lost/stolen fraud to counterfeit fraud ratio out of norm with peers Visa Risk Team contacting identified issuers Issuer customer service screen coding issues Issuer customer service training issues Reminded US issuers of requirement to fraud report accurately with June 8, 2017 Visa Business News publication 13 NPECA Fuel Segment Update April 15, 2018

14 EMV Update 14 NPECA Fuel Segment Update April 15, 2018

15 EMV liability shift for counterfeit fraud There is no EMV liability shift on contactless or lost/stolen fraud transactions 15 NPECA Fuel Segment Update April 15, 2018

16 EMV liability shift for lost/stolen fraud at AFDs Consider not allowing fallback at the AFD 16 NPECA Fuel Segment Update April 15, 2018

17 U.S. EMV chip migration status as of December % of overall US payment volume was on EMV cards 67% of Visa credit and debit cards had a chip on them 2.7 M merchant locations accepted chip cards Merchants who have completed chip upgrades saw a decrease in counterfeit fraud dollars of 70% September 2017 compared to December 2015 SOURCES: U.S. card figures per VisaNet data and operating certificates provided to Visa by client financial institutions as of end December 2017; US chip merchant location data based on VisaNet data as of end December Merchants that have completed an EMV transaction in the last 30 days considered chip-activated; Counterfeit fraud reduction at fully chip-enabled U.S. merchants for the quarter ended September 2017 compared to the quarter ended December Fully chip enabled merchants defined as locations where 75% of card present payment volume is chip-on-chip. Data includes both U.S.-issued credit and debit cards; Transaction number and volume based on VisaNet data for U.S. locations with chip transactions as of end December * Card-not-present includes e-commerce, mail order, and telephone order transactions. 17 NPECA Fuel Segment Update April 15, 2018

18 Limits on U.S. Domestic EMV Liability Shift Chargebacks Ending 18 NPECA Fuel Segment Update April 15, 2018

19 Fallback Fraud Prevention Best Practices Set Attempted Chip Reads Counter to Allow 2 or 3 Attempts Prior to Falling Back to Magnetic Stripe Monitor Fallback Volumes and Terminal Performance Use a magstripe read for Fallback, not key entry Evaluate Highly Suspicious Transactions At The Point Of Sale That Result In Fallback Have the Cashier Perform the Fallback Transaction and Review the Security Features of the Card Perform a Read and Compare Verification on Fallback Transactions Implement Fallback Velocity Checks Implement Visa Transaction Advisor 19 NPECA Fuel Segment Update April 15, 2018

20 EMV Key Takeaways Consider not allowing fallback at the AFD Implement Quick Chip for AFD Greatly reduces certification requirements/process Increases transaction speed Implement contactless with EMV No more changes to AFD EMV liability shift date Start planning for AFD EMV now 20 NPECA Fuel Segment Update April 15, 2018

21 Acceptance Initiatives Review 21 NPECA Fuel Segment Update April 15, 2018

22 Signatures Effective April 14, 2018 Visa is making the signature requirement optional for all EMV enabled merchants in the US (including US territories) and Canada Applies only to chip enabled devices (Terminal Entry Capability = 5 ) Applies if the transaction is contact chip, contactless, magstripe or key-entered Signatures optional up to any transaction amount VEPS limits still apply to any devices not chip enabled No changes to EMV Kernel; No re-cert required, just remove signature prompt Retrieval request fulfillments going away April 14, 2018 though issuers can continue to request through October 12, NPECA Fuel Segment Update April 15, 2018

23 POS Key-Entered Transactions and Use of CVV2 23 NPECA Fuel Segment Update April 15, 2018

24 Contactless Working with Visa issuers for more contactless card issuance NFC contactless transaction are considered Card Present 24 NPECA Fuel Segment Update April 15, 2018

25 AFD AVS Mandate 25 NPECA Fuel Segment Update April 15, 2018

26 Interlink AFD Partial Authorization Non-Participation Fee 26 NPECA Fuel Segment Update April 15, 2018

27 New Publications Targeted for Fuel Retailers Now publically available on Visa.com AFD Chip Acceptance Awareness AFD Fraud Prevention Best Practices 27 NPECA Fuel Segment Update April 15, 2018

28 Visa Claims Resolution 28 NPECA Fuel Segment Update April 15, 2018

29 Visa Claims Resolution Key points Existing 18 chargeback reason codes with 24 conditions will be consolidated down to 4 dispute codes with 24 sub-codes Fraud Authorization Processing Errors Consumer Disputes Under old process acquirers had 45 calendar days from chargeback processing date to represent a chargeback. With VCR now 30 days to respond to a dispute You have to respond to each dispute within 20 days to avoid a fee (effective July 1, 2018) New dispute guide on VCR is being published for merchants 29 NPECA Fuel Segment Update April 15, 2018

30 Summary of Recent Efforts Supporting Fuel Merchants Managing issuers who want to move up the October 2020 AFD EMV liability shift date Mandated AFD AVS for high fraud geographies Monitoring issuers for AFD fraud reporting accuracy Reaching out to Florida government agencies to highlight AFD counterfeit fraud problem Produced communications for fuel retailers on AFD fraud mitigation and AFD Chip acceptance awareness 30 NPECA Fuel Segment Update April 15, 2018

31 Thank You 31 NPECA Fuel Segment Update April 15, 2018