Leaders in Payment Fraud Prevention

Transcription

1 Leaders in Payment Fraud Prevention Kami Boyer Director, International Partnerships & Alliances 6 December 2012

2 Fast Facts Attempted fraud has increased by 7.19% by volume and 48.8% by value compared to Average ticket price of attempted fraud is $135 while genuine consumers spend $99.37 Fraudsters spent 1.36 times more than that of genuine consumers Fraudsters increased their average ticket price by 25% compared to last year s figure of $ Non Fraudulent Chargebacks account for 27% of total chargebacks, which has increased by 51% since Non Fraudulent Chargebacks are typical of non-receipt of goods, damaged goods, return credit not issued, or system issues. Based on ReD data from January 1, 2012 October 31, 2012

3 New Channels Increase Risk Attempted fraud rates range from 1.1% - 3.8% for these customers on MOBILE WIRELESS as % of total volume The average attempted fraud rates are 0.4% % thus highlighting significantly higher risks from mobile today

4 About ReD

5 A market leader Specialist provider of fraud prevention and payment services to card issuers and acquirers, merchants, switches and processors worldwide Services are agnostic of payment type, payment channel and currency Provided as managed services, hosted services or installed software Tailored, by industry experts, to the needs of individual customers More than 300 large, blue-chip customers, on six continents Many hundreds of additional merchant customers connected through Payment Service Providers Unique and proprietary technology and databases, including patented neural network technologies Privately owned by Palamon Capital Partners and ReD management Debt free, profitable and high growth

6 Present across the payments value chain

7 Protecting the brands you know and trust Travel Telephony Retail Oil Banking ROW Asia Pacific America Europe TotalTrip

8 WHY FRAUD MATTERS

9 Why fraud matters Fraud is becoming an increasingly important issue in payment networks Increases costs - through chargebacks, losses, manual reviews Reduces revenue - through false positives Reduces confidence - and raises consumers online security concerns Damages customer experience - and discourages repeat business

10 Fraudsters Steal a Wide Range of Goods Physical goods: Provide valuable tangible goods to sell Prepaid Cards (Up to 30% fraud rate) Size 32 Jeans, size 10 shoes (5% fraud rate each) Latest mobile phones (iphone has a 28% fraud rate) Laptops (12% are fraud) Plasma TVs (8% are fraud) Virtual Goods: Less valuable but provide anonymity Music downloads (5% fraud rate) Game characters (15% fraud rate)

11 You Must Respond Quickly to Fraud Attacks

12 Fraudsters Use Thousands of Stolen Cards 23 unique stolen cards used from just one

13 Fraudsters Collude Working Together Fraudsters sharing addresses card numbers 18 different compromised cards used with 10 addresses

14 You Must Respond Quickly to Fraud Attacks

15 as Large Organised Attacks Can Potentially Ruin Merchants Over 4,000 cards used Over 300,000 of fraud attempted within only 2 weeks

16 ITS ALL ABOUT DATA

17 ReD Shield - leading ecommerce fraud protection Real-time, managed fraud prevention for ecommerce merchants and PSPs Detecting and managing domestic and cross-border fraud, in multiple sectors Protecting transactions accepted via internet, mail order, telephone and interactive TV Payment type, acquisition channel, device and currency agnostic 24 x 7 x 365 with 99.9% availability; decision in 400 milliseconds A firm recommendation accept, challenge, deny with every transaction Underpinned by expert risk analysts Ready now, without major infrastructure investment

18 People and process supporting technology Rules Data Education Analysis Reporting

19 Standard Profiles Card number CV2 AVS Amount In-house or standardised solutions Low chargebacks or low insults not both Purchase velocities Billing / shipping details

20 ReD Profiles Card number Product / delivery / customer details Payment details / 3DS responses CV2 AVS Shopper history Amount Purchase velocities Global negative lists / merchant specific positive lists Billing / shipping details Marketing/loyalty programmes Unlimited bespoke data field functionality

21 ReD Profile segmentation Same day/next day delivery Mobile payments Non registered / registered Paypal / alternative payments Call centre sales High risk technology Click & collect International Aligned to customer service proposition Marketing segments 3D secure status Risk strategies aligned to business requirements

22 Delivering a clear economic advantage

23 PRISM REAL TIME FRAUD PREVENTION ON THE SWITCH

24 Case study : Payment switch Reference installation overview Customer profile - Debit transaction switch member financial institutions - 25m accounts, 14m transactions per day - Fraud monitoring as a new service offering and revenue stream - Connex EFT Software on HP NonStop Desired solution - Allow Real-Time decisions in the authorisation process with minimal impact on total processing time - Provide neural network score on every transaction - Offer FIs the ability to review their own fraud alerts - Allow Pulse overall administration and monitoring of rules and strategies

25 PRISM Real Time system summary

26 HOW DO ISSUERS GET ACCESS TO ECOMMERCE DATA

27 ReD Fraud Xchange Collaboration between the merchant, Issuer and Acquirer is something that has been difficult to achieve because of the natural tensions that exists within this payments value chain. In the ecommerce landscape the merchant holds the liability for a transaction in the event of fraud. The role of an acquirer, in part, is to manage that liability and to make sure that the merchant stays in good financial standing, because they are next in line in the liability chain if things go wrong. The issuer s role is to protect the card holder who is their customer and to make sure that anything that looks like fraud gets pushed back down the acquiring pipe. Merchant Issuer Acquirer Because of the unique role ReD plays in the middle of this value chain, ReD can provide a data connection between the issuer we hold a large amount and merchant to stop fraud faster. Here are some examples: Informing issuers of merchant blocks on accounts that received and authorization Informing merchants of accounts that, since the authorization was issued, have now been to stop shipment.

28 RFX data process flow

29 Key Messages Fraud is easy and quick Data is key to make the right decisions as to whether a transaction is fraudulent or not THE MORE DATA, THE BETTER! New Channels bring new types of fraud and risk Issuers can access merchants rich data to stop fraud on their cards

30 MAKING PAYMENTS SIMPLE AND SECURE. Thank you