CyberSource Viewpoints

The Digital Strongbox – Securing Your Payment Data with...

Fri, 18 May 2018 10:22:38 -0400

The Digital Strongbox – Securing Your Payment Data with Point-to-Point Encryption

Shahzad Khan, Senior Director, Global Acquirer Processing, CyberSource

Whenever money travels from one point to another, theft inevitably follows. Throughout history, it’s been common for pirates and brigands to stake out well-traveled commerce lanes to intercept valuable traffic.

Today’s Digital Commerce Lanes

In today’s world, this kind of physical heist is rare, and when it does occur, the novelty makes it highly newsworthy. But that doesn’t mean it has disappeared. Increasingly, this kind of “highway robbery” is migrating to the digital lanes of commerce, where bits of data can be intercepted without the need for ships, cannons, or bandits in black hats.

The More Things Change

Historically, merchants, bankers and others took steps to guard their valuables against theft in the form of caravans, armed escorts, safes and strongboxes. Today, armored cars are a common sight in cities across the world, and stand as a modern representation of an age-old practice.

In the digital age, while the tools differ, the same paradigm still applies. Instead of strongboxes and military escorts, encryption is used to secure valuable data in transit.

Point-to-Point Encryption

The PCI Security Standards Council (PCI SSC), a standards body established by card brands calls this Point-to-Point Encryption, or P2PE. P2PE is a terminal-based encryption standard, where payment data is encrypted within a point-of-sale (POS) payment terminal. This encryption safeguards card data from modern-day hackers and brigands as it moves through your network and on to a decryption and processing gateway.

On the List

In order to meet the PCI SSC standard, a P2PE solution must meet three high-level requirements:

Card data must be encrypted using strong cryptography
Encryption must be performed in a PCI P2PE-approved hardware device
Decryption must not be possible within the merchant environment

Solutions that have been validated by the PCI SSC as meeting its P2PE standards are referred to as “listed” solutions. Solutions that have not been validated, but provide similar functionality, are commonly referred to as “unlisted” solutions.

Unlisted solutions hold a degree of uncertainty, as there may be no way for you to know whether a solution provider has fully addressed the controls that constitute the PCI P2PE standard. They may also mean a lot more effort on your end, in the form of needing to perform a thorough compliance assessment and potentially needing to implement additional security measures.

With a listed solution, you have the confidence of meeting the criteria of the PCI P2PE standard. Furthermore, you can substantially reduce your PCI compliance requirements, saving you a great deal of time and effort.

CyberSource Point-to-Point Encryption

In order to bring you the security and compliance benefits of Point-to-Point Encryption, we are now offering our own PCI-validated P2PE solution. CyberSource P2PE helps protect payment data across all segments of your network, and prevents unencrypted transaction data from touching your systems.

To learn more about securing your data with Point-to-Point Encryption and our own P2PE solution, check out our ebook, Securing Payment Card Data in Flight.

Missed MRC Vegas 2018? Check Out What We Covered Ron Buchanan,...

Fri, 11 May 2018 17:28:49 -0400

Missed MRC Vegas 2018? Check Out What We Covered

Ron Buchanan, Enterprise Sales Leader, Visa

Every spring, around 1,500 eCommerce professionals and merchants, representing over 450 companies in more than 30 countries, converge on Las Vegas for MRC’s flagship conference. Over four days, attendees get a chance to learn about the latest innovations in fraud prevention, payment processing, technology, cybersecurity and financial services.

We were there this year with subject matter experts Scott Boding, VP of Product Management, and Joe Salerno, Senior Director of Client Insights, who spoke with attendees about the latest in payment innovation, particularly augmented intelligence and its role in fraud management and prevention.

Augmented intelligence describes the power of maximizing human intelligence with technology – giving us the ability to scale the essence of what makes our analysis and decision-making still very valuable in fraud prevention and management. In contrast, artificial intelligence implies displacing human intelligence, eliminating the ability to guide and even overrule the machine learning, if necessary. Scott spoke to the value of augmented intelligence in his session, “Artificial Intelligence Gets You So Far. Augmented Intelligence Can Get You Further,” exploring the benefits of combining machine learning with human judgment to fight fraud.

CyberSource employs this philosophy in our Decision Manager and Rules Suggestion Engine solutions, which have helped merchants detect more fraudulent transactions while increasing acceptance of good orders, making for happier customers and less operational waste. The solutions work together to bring machine learning into the realm of rules creation. Rules Suggestion Engine uses the outputs of Decision Manager’s advanced machine learning models as inputs into the rule creation process, suggesting new fraud rules to consider. The basis of the Rules Suggestion Engine is the merchant’s unique transaction data, and the merchant can test the proposed rules using Decision Manager before implementing them in a live environment. So, the merchant is the ultimate decision-maker, and able to maintain the flexibility to set and adjust rules based on expertise, category context and automated inputs derived from transaction history.

At MRC, one of our merchants, CMT, brought to life its experience with Decision Manager as well as Managed Risk Services, sharing how these solutions have bettered the customer experience of its NYC taxi riders. In the session “Taking Fraud for a Taxi Ride,” CMT Group discussed how it reduced chargebacks by 92%!

Additionally, CyberSource’s Joe Salerno discussed how merchants are approaching eCommerce payment management not just as a necessary task, but also as a strategic function and competitive differentiator. In his session, “Global Payments Survey: Winning through eCommerce Payments Management,” he emphasized the challenges they face, the best practices they employ and the benefits they are realizing. Insights are based on the recent global study capturing attitudes and practices of 484 payment specialists from mid-market and enterprise level organizations. The highlight of the session was a panel discussion with payments experts sharing their perspectives on the study’s findings, including commentary on improving performance. The full results of the survey will be available in the coming weeks.

If you made it to MRC, we hope you enjoyed the conference and learned as much from the conversation as we did. For those of you in Europe, we will also be at MRC Dublin from May 14 through 16, and hope to see you there. In the meantime, we will share our latest insights and innovations on CyberSource Viewpoints.

How to Accept Payment from a Fridge (and Other Problems You Can...

Thu, 10 May 2018 17:04:46 -0400

How to Accept Payment from a Fridge (and Other Problems You Can Solve with Smart Tokens)

Justin Fraser, Head of Enterprise & Alliances Sales, CyberSource

I never thought 15 years ago that I’d be talking about the best way to accept a payment from a domestic appliance. But that’s how I started a talk I did at a recent event. It goes to show just how much things have changed in the world of payments. And how they’re going to keep evolving.

Ok, not many of us are shopping via a voice-activated smart home just yet. But what we do expect is to buy what we want when, where and how we want. And for it to be both easy and fast.

It’s a fact merchants can’t ignore. To thrive they need to offer smooth payments. Let’s take an example. Say you’re a retail group with multiple sub-brands. What if you could instantly recognize customers, whichever of your businesses they interact with? And because of that, you could allow them to pay with a tap of a button or card, or a scan of a fingerprint? Potentially, you’re going to get more payments and more loyal consumers.

It’s All About the Token

So how does the retail group make this possible? Through tokenization. This is when you turn sensitive data into a code that you can safely use across the internet or wireless networks. It sits in place of the original details, which can remain locked away. There’s a clear security reason for tokens. But people soon latched on to them as a way to speed payments. There’s no need to keep re-entering details, so it makes the customer experience much better.

This dual purpose has made tokens critical to ecommerce today. Let’s put it in perspective with a stat. Amazon Prime is tokenizing consumer card data today. And of the US households with internet, just under half have an Amazon Prime subscription.¹ That’s a lot of people benefiting from an effective tokenization strategy.

The Key to Future Payments

So, tokens are already a key part of payments. But the IoT will make them even more important. In the future, we’ll live with billions of connected devices. And we’ll be able to use them to pay or accept payments. But to make this a seamless experience, we’ll need to call instantly on saved data and process it securely.

Tokens will be integral to these payments, whether someone’s restocking their smart fridge, calling out a shopping list in their car, or accepting an offer to buy a product they see in their VR headset.

Smart Devices Demand Smart Tokenization

As the IoT explodes, Visa expects to see a ten-fold increase in its network, leading to 30 billion ways to pay and 400 million ways to be paid.² That’s a lot of tokens to manage. So, it won’t just be about using tokens but managing them well.

The best token management services will standardize token formats and payment types. This will help you adopt any new channels that emerge. And it will make it far easier to analyze data and the behavior of individual customers. Smart token managers will also store information in highly secure data centers.

For a merchant, this kind of approach makes two exciting things happen.

First, you keep the currency of trust. Trust is at the heart of payments based on stored data. So, data loss is devastating. Loyalty that may have taken years to build can disappear in seconds. Tokens can help you earn and protect hard-won trust.
Second, you make transactions invisible. The best service is the service you don’t even notice. It’s effortless―so nothing detracts from the experience. Tokenization can make this possible across channels, brands, and payment methods.

Tokens have a major role to play in the best customer experiences. If you’d like to learn more about what your business could do with them, take a look here.

1 - Statista, July 2017. Available at: https://www.statista.com/statistics/504708/amazon-prime-subscription-households-usa-share/

2 - Visa, Operating certificates and Visa Networks, CY2016

The 2018 Global Airline Fraud Management Report: Emerging...

Tue, 08 May 2018 16:42:23 -0400

The 2018 Global Airline Fraud Management Report: Emerging Payment and Fraud Management Technologies Appear Poised for Takeoff

Fernando Souza, VP Global Merchant Solutions, CyberSource

Payment fraud affects every industry, but not necessarily in the same way. Each industry has certain nuances in transaction patterns, technology adoption, customer behavior and other factors that should be taken into consideration.

Airlines are one such industry, with digitization changing every aspect of the customer experience, from booking and check-in to security, boarding, and even in-flight entertainment. In the 2018 Global Airline Online Fraud Management Report, we put 112 airline companies under the magnifying glass. These airlines represent full-fare and low-cost carriers from around the world, and provide a glimpse into nuances of the airline industry, as well as nuances between different carrier types and across different geographic regions.

To explore how trends have played out over time, we kept the underlying methodology consistent with the 2014 study wherever possible.

Key Findings

Among the findings in this report:

Credit and debit cards are the most common payment method accepted through direct sales channels, but they also exhibit far and away the highest “above average” fraud incidence for all airlines, at 27 percent.
Mobile phone payments are taking off, with mobile revenue quadrupling since the 2014 study.
Bookings rejected or canceled due to suspected fraud have increased slightly, from 3.4 percent in the 2014 study to 3.8 percent. North American-based airlines have the highest rejection rate, at 7 percent, while Asia Pacific carriers only reject 1.7 percent of bookings.
Revenue lost to payment-related fraud is also up slightly, from 1 percent in the 2014 study to 1.2 percent.
Manual review rates fell from 27 percent in the 2014 study to 18 percent in the current report.

Booking Direct

While full-fare carriers (FFCs) remain buoyed by a high travel agency booking volume (31 percent of revenues) largely fueled by corporate travel, the overall trend is clearly toward increased direct bookings, whether on an airline’s website, via mobile payment, or through call centers, airport kiosks and ticket counters. Taken together, direct booking accounts for 55 percent of overall passenger revenue.

As more bookings flow through direct channels, airlines must take on increasing responsibility for payment acceptance and fraud management. This includes not only credit and debit card payments, but new payment methods, as well.

Mobile revenues have quadrupled since 2014, and show no sign of slowing down, particularly in the Middle East and Asia Pacific regions¹. Online wallets such as PayPal and WeChat Pay also are finding increasing acceptance, and both payment methods have “above average” fraud incidence rates that are a fraction of traditional credit and debit cards.

The Future of Airline Fraud Management

When we asked airlines about the challenges they face in managing payment fraud, their answers revealed a bias toward the future. The top three challenges cited were²:

Lack of resources
Keeping up with new fraud management technologies
Identifying and responding to emerging fraud attacks

Each one of these challenges is related to readiness for the next iteration of the digital economy, and signs indicate that airlines are already taking steps to address them. For example, airlines seem to be embracing new fraud management technologies. Manual review rates are down to 18 percent, compared to 27 percent in the 2014 study, a sign that investments in automated screening are paying off. Still, there is room for improvement. At present, only 12 percent of manually reviewed bookings are canceled³. Moving forward, increasingly sophisticated machine learning solutions should be considered to further optimize the screening process and free up time and resources that could be better used elsewhere.

Airlines also should be advised to take steps to accommodate the rise in mobile payments, from embracing tokenization, to more readily adopting new payment methods and exploring new validation tools, including biometric indicators. Fingerprint readers and facial recognition are already making inroads in other aspects of air travel, and are increasingly available features in mid- and high-end smartphones, making them a natural fit for mobile payments.

Overall, airlines appear to be doing a good job keeping fraud rates and costs in check. But they should seek solutions that allow them to optimize their resources, respond more rapidly to new technologies, and automatically detect and get in front of novel new fraud techniques.

CLICK HERE to read the full 2018 Global Airline Fraud Management Report.

1 - Mobile channel revenues reported by respondents was less than 2% in 2014 and this year it is 7%. Q. Please estimate the percentage of passenger revenue booked through the following sales channels for the full year 2016. Base: Airline companies N=110

2 - Which of the following have been your biggest challenges related to e-commerce fraud? Please select up to three. Base: Airline companies N= 110

3 - Q. Which of the following have been your biggest challenges related to e-commerce fraud? Please select up to three. Base: Airline companies N= 110

Is Fraud Manager Still a Fitting Job Title? Andrew Naumann,...

Wed, 25 Apr 2018 14:31:43 -0400

Is Fraud Manager Still a Fitting Job Title?

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

You’re a fraud manager. But how do you describe your job to people? I used to think the answer was fairly simple: someone who protects a business from the damaging effects of fraud.

But times have changed. In our digital economy, payment acceptance is just as important as fraud prevention. And this means you—and your fellow fraud managers—have a bigger business role to play than ever before.

A brave new digital world for fraud managers

It’s no secret that companies are embracing new business models to stay competitive. Because today’s customers want things now. They want to make online purchases without interruptions, anywhere in the world, from any device and at any time. And if they can’t transact in a few clicks after deciding to buy something, they’ll likely go elsewhere.

This makes fraud a much trickier beast for us to tackle. Mobile is quickly changing buying behavior, which means you should have different fraud rules in place for mobile and PC-based transactions. Fraudsters have more advanced tech for carrying out attacks. And they can easily compromise more personal details by hacking accounts that hold information stored on file.

This complex fraud landscape means that fraud-prevention measures—and fraud managers—are having to change. Fraud managers should be involved with the business as it introduces new business and payment models. Your input is crucial in making sure the payment experience allows the business to grow and stay competitive. You now have a broader role to play.

And you’ve got a tough balance to strike.

Walking the tightrope of profit and protection

To help business growth while keeping customers secure, there are three key objectives that businesses need to balance:

Maximizing revenue. Reducing false positives, accepting more good orders and reviewing them faster to give customers a better experience.

Minimizing fraud loss. Making detection as accurate as possible to reduce fraud rates and chargebacks.

Minimizing operational costs. Finding efficient ways of streamlining and automating the review process.

Focus too much on any one of these and you could be in trouble. A very low fraud rate, for example, could be a sign that you’re being overzealous with your fraud-detection rules. Genuine customers might get caught in the crossfire. And that could be bad news for your brand.

For fraud managers, it’s all about finding the right balance between these three objectives. And there’s no single “right” approach. It will vary depending on the economy you’re working in. Software companies, for instance, often have large enough margins and product volumes to take on a little more risk and drive more revenue. But the same can’t be said for sellers of upmarket handbags. They have to be more cautious, because their margins are smaller, and the losses they make from fraud take longer to recoup.

Getting the balance right is particularly important when growing into new markets. Fraud levels vary from one region to the next. So you need to know how much risk to take on as you expand into new territories.

From threat to opportunity

So what does this mean for the evolution of your role?

Fraud managers have always been gatekeepers; that hasn’t changed. But competition is fiercer than ever in our digital economy. And your job isn’t just about keeping out the bad customers any more. Welcoming good customers is important—and holding on to your best customers is even more important.

To give the good customers the best experience, you need data that shows you how good customers behave. You need to know when fraud’s not happening. Armed with the right data, you can help shape better, more seamless payment experiences. And if you get these experiences right, more accepted payments and business growth will surely follow.

Now you’ve got a bigger business role to play, perhaps it’s time to rethink how we talk about fraud managers.

Discover what other CyberSource experts are saying about the evolution of fraud management by reading our insight report, Managing Risk. Meeting Expectations.

Download the report >

Taking Fraud for a Taxi Ride Sean Barding, Strategic...

Wed, 21 Mar 2018 12:19:53 -0400

Taking Fraud for a Taxi Ride

Sean Barding, Strategic Managed Risk Analyst, CyberSource

Fraud management is far more than an operational box to be checked. Implemented effectively, it can reduce financial headwinds, limit economic risk, and free your business to expand products, services, and geography more quickly.

Let’s explore how one company, CMT Group, used CyberSource Decision Manager to dramatically reduce fraud losses and give newfound momentum to its business.

CMT Group – Transforming Taxi Payments

From its founding in New York City in 2005, Creative Mobile Technologies, LLC (CMT) has been expanding to provide innovative mobile booking and payment systems for taxis around the world. Today, the company’s point-of-sale devices are used by approximately 50,000 taxis in 150 cities spread across North America and Europe.

In 2015, CMT introduced a mobile passenger booking and payment app – Arro – to enhance passenger convenience while helping taxis remain competitive with emerging ridesharing services. Launching the app – and with it a new payment channel – sent CMT on a mission to improve its fraud management practices.

Time to Stop the Bleeding

Combating fraud is always a challenge, but for CMT, it became a business imperative after the introduction of its mobile app. With this new payment channel, CMT found itself facing $100,000 per month in chargebacks related to card-not-present fraud.

“We could no longer absorb the losses,” says Jeffrey L. Wilson, CMT General Counsel and Director of Business Development. “We needed a solution that could help reduce fraud and stop the bleeding.”

CMT’s first attempt to implement a fraud management solution yielded disappointing results, but it did give the company a silver lining—insight into the increasing scope of the problem. To improve fraud management going forward, the CMT team needed to find a better solution, and one that could be automated and strengthened over time.

Any new solution also had to accommodate the unique nature of the company’s payments business. Whether someone is registering on the app or paying for a cab ride, there’s simply no time for manual review.

“If a passenger has to wait two minutes while someone reviews multiple sources of data, the taxi company will never see that passenger again,” says Chris Plunkett, Director of Product Line Management for CMT.

A Better Solution

In the course of its search for a new fraud management solution, CMT’s card brand partners and other technology partners recommended CyberSource. The CMT team found that CyberSource understood and embraced the company’s unique challenges to propose a comprehensive, effective solution.

CMT ultimately chose the CyberSource Decision Manager fraud management solution to drive down fraud losses. Decision Manager supports both the company’s Arro mobile app and a white-labeled version of the app branded for individual taxi companies. To date, CMT has implemented Decision Manager in the United States and the United Kingdom, with further rollouts planned in other North American and European countries.

CMT also has implemented the CyberSource payment gateway, which connects to its back-end processor, in the U.K., and plans to roll it out in North America as well.

In order to maximize the value of Decision Manager in managing fraud, CMT is using CyberSource Managed Risk Services. With Managed Risk Services, a dedicated analyst proactively assists with ongoing fraud concerns, works with CMT personnel to refine and test rules, and stays attuned to evolving fraud threats. These services have proven critical in helping CMT combat fraud. In the first month of implementation, CyberSource helped CMT reduce chargebacks by a staggering 92%.

“We didn’t have the proper resources and expertise in-house to build a large fraud department,” says Plunkett. “CyberSource Managed Risk Services gives us continuous access to expert assistance to help us optimize our fraud management strategies.”

Additional Insights

A Dedicated Team Can Help Streamline Implementation—To help CMT deploy Decision Manager and the payment gateway quickly, CyberSource assigned a team that included a project manager, a solution expert, and a technical integration specialist.

“Throughout the implementation process, the CyberSource team was focused on keeping the project moving and ensuring our success,” says Plunkett.

Real-Time Decisions Help Deliver a Strong Customer Experience—Decision Manager helps CMT and its taxi company customers maintain a rapid, seamless customer experience for passengers.

“CyberSource Decision Manager enables us to make fraud decisions in real time so we don’t disrupt the experience for good customers,” says Plunkett.

Reducing Economic Risks Enables Business Expansion—With Decision Manager and CyberSource Managed Risk Services, CMT has significantly reduced fraud losses. That reduction enables the company to move forward with the development of new features and functions for the app.

Fewer monthly losses also mean CMT is in a better position to continue rolling out its mobile app in new cities across North America and Europe. “By working with CyberSource, we have a better handle on fraud and can expand into new markets with much less financial risk,” says Wilson.

Expert Resources Can Help Contain Evolving Fraud Threats—The Managed Risk Analyst service is helping CMT navigate a constantly changing fraud landscape. Whenever regulations change or new threats emerge, the analyst is ready to recommend new rules to implement.

“It was definitely a smart decision to bring in an expert from CyberSource rather than trying to develop our own expertise internally,” says Plunkett. “With fraud management, there’s no finish line. You have to move fast, and you have to keep moving,” says Wilson. “Now we have the resources we need to stay ahead of fraudsters.”

Want to learn more about Decision Manager and Managed Risk Services? CLICK HERE to explore how CyberSource can help your business reduce fraud losses.

CyberSource Brings Machine Learning into the Realm of Rules...

Tue, 20 Mar 2018 12:35:57 -0400

CyberSource Brings Machine Learning into the Realm of Rules Creation with the New Rules Suggestion Engine

Scott Boding, Vice President, Product Management, CyberSource

Generate Fraud Rules Based on Historical Data

It is important for you to monitor your fraud strategy as fraudsters continually change their tactics. But how do you identify potential new fraud rules based on historical fraud patterns?

CyberSource Rules Suggestion Engine draws on your unique transaction data to automatically present recommended rules that can augment your existing fraud strategies. As well, each suggested rule is accompanied with appropriate metrics to help you measure its performance against the selected transaction data.

Capitalize on Machine Learning

CyberSource has extended the capabilities of CyberSource Decision Manager beyond transaction scoring by now bringing machine learning into the realm of rules creation. Rules Suggestion Engine uses the outputs of Decision Manager’s advanced machine learning models as inputs into the rule creation process, suggesting new fraud rules to consider. Incorporating machine learning models helps increase the effectiveness of your fraud rules, enabling you to fine-tune your fraud strategies.

Stay One-Step Ahead

With Rules Suggestion Engine, CyberSource is enhancing the analytical capabilities of Decision Manager beyond Decision Manager Replay. You can help meet the changing requirements to stay one-step ahead of fraudsters and accept more good customer orders.

Test the Impact of Suggested Rules before Implementing

Rules Suggestion Engine, in conjunction with Decision Manager Replay enables you to test any proposed rule against historical data. With Decision Manager Replay, you can measure and understand the effectiveness of a particular fraud rule before implementing it in a live environment.

CLICK HERE to learn more about our Rules Suggestion Engine and how it can help you optimize your fraud management strategies.

Master the Fraud Management Balancing Act Andrew Naumann, Vice...

Mon, 27 Nov 2017 17:15:23 -0500

Master the Fraud Management Balancing Act

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

Fraud management is a balancing act…of balancing acts. As a business, you must weigh customer expectations of a seamless shopping experience against the need to protect yourself and your customers from fraud. You also have to minimize fraud losses without being so cautious that you end up sacrificing revenue due to false positives. And of course, you have to juggle all of these considerations while keeping operating costs as low as possible.

The state of fraud management

In our 2017 North America Online Fraud Benchmark Report, we dove into this tension and explored how businesses are faring in the ongoing effort to reduce fraud and accept more good customer orders.

Overall, businesses are succeeding in containing direct fraud loss (i.e. chargebacks, credits issued due to fraud), and fraud losses have stabilized over the past few years at just under 1 percent of total revenue^1,2. With the overall loss rate holding steady, now is a good time to focus on optimizing your fraud management processes and reducing indirect fraud losses, such as revenue lost due to false positives or higher operating costs associated with more manual review of orders.

From holding ground to making progress

How do you make progress against indirect fraud losses? Where do you even start? It’s not like you can just press a button that says “Reduce False Positives”. Optimizing your fraud screening process is more like stepping into a control room packed with levers. Which ones should you pull? Which ones should you leave alone? Are some combinations better than others?

It helps to understand what those levers – your fraud detection tools and rules – do, and when and how to use them.

CyberSource 2017 North American Online Fraud Benchmark Report

When asked, our respondents selected address verification services (AVS), card verification number (CVN) and device fingerprinting1 as the most effective fraud detection tools These are just a few of the tools you can tap, however, and the best combination varies from category to category and even business to business.

So how do you determine which tools to use, and how to configure them? It may seem like a shot in the dark, but it doesn’t have to be. Our Decision Manager platform includes the industry’s first fraud tuning analytics tool, Decision Manager Replay. With Decision Manager Replay, you can test different rule sets against historical data to better optimize your screening models. This is a great way to better understand the interplay between different rules, and the impact different combinations can have on your fraud management efforts.

Kind of makes you wish Decision Manager Replay could be applied to other aspects of life, doesn’t it? Unfortunately, we’re not quite there yet.

Reducing reliance on manual review

Once your automatic screening models are optimized to keep direct fraud losses in check while minimizing false positives, you can further fine tune them to reduce the number of orders going to manual review. In some cases, human oversight is critical, but it’s also costly, and if you’re manually reviewing too many orders, it can be inefficient and quickly consume a large part of your fraud management budget.

CyberSource 2017 North American Online Fraud Benchmark Report

Just how big of an issue is this over-reliance on manual review? Well, 79 percent of respondent businesses from the US and Canada reported that they conduct manual reviews, and on average, they manually review 25 percent of all orders. Of those, fully 89 percent end up being accepted. That’s a clear indication that more orders are being reviewed than necessary. Clearly, there’s still plenty of room for optimization¹.

By relying on automated screening designed specifically for your business and continually assessing your fraud strategies, you can make your entire fraud management process more efficient and save your manual reviewers for the only the most ambiguous orders.

How does your business compare?

While businesses are generally holding the line against online fraud, there is room for improvement in:

Optimizing automated screening
Turning away fewer genuine customer orders by generating fewer false positives
Reducing the number of orders flagged for manual review

Curious to see where your business stands? We’ve developed a Fraud Benchmark Tool to help you see how you stack up, and identify areas where you may want to make adjustments to your fraud management process. CLICK HERE to answer a few key questions and find out how your fraud metrics compare to your peers.

How loyalty and account takeover fraud can affect your business...

Tue, 07 Nov 2017 16:05:59 -0500

How loyalty and account takeover fraud can affect your business

Denise Burkett, Omni-Channel Payments and Fraud Specialist, CyberSource

I’ll admit it. I may not always take my own advice. So, when I advise people what they should do to keep their accounts safe, I feel a little guilty. Because while I know that I’m meant to use different passwords with all my loyalty programmes, I’m probably using the same password for each of them.

And then I remember that I’m not alone. A survey highlighted that around half the consumers out there use the same password across other accounts¹. It gets worse. Only about one in five people change their passwords once a quarter². Other research suggests that almost half use passwords that are five years old³.

So, when I was asked recently to take part in the CyberSource webinar on loyalty and ATO fraud, I felt that I could add real value. That’s not just because I’ve been in the industry for longer than I care to remember. It’s because I know the pitfalls first-hand.

Loyalty fraud – a risky business?
There’s a huge amount of value – more than $238 billion in one 2015 estimate^⁴ – sitting on the books of airlines, hotels, and other programme owners. Loyalty fraud is a growing risk for every merchant with a loyalty programme.

It’s also really easy to have multiple loyalty cards. I’ve one for my grocery store, one for my beauty rewards scheme and a whole range for airlines and hotel chains. Last time I counted, I had at least eight, and I’m not the worst offender out there. It’s difficult to keep tabs on them all. And remember, because people use the same password, it can be a case of break into one and you break into them all. That makes it tempting for fraudsters. They see it as a weak point in many companies’ fraud management. If people aren’t protecting their passwords, it means they’re not taking control of their own security. If that’s the case, then who will? You guessed it.

Consumers such as myself see points as found money which I can use to take my husband on holiday, but fraudsters take a different view. To them, points and miles are real money that’s easy to steal, and that makes it worth their while.

Looking beyond the Me, Me, Me
It’s easy to be selfish and think only of the financial damage that I – and other consumers – could suffer. In fact, account takeover, or any other type of fraud, for that matter, may be damaging to consumers. But it’s even more harmful to businesses. One of the biggest challenges, for example, has always been attracting and keeping customers. And in today’s disruptive environment, it’s even tougher.

If customers see that someone’s compromising their accounts and the company’s unable to prevent it, they’ll take their business to the competition. The loyalty you spend years building up can be gone in seconds.

If loss of reputation means loss of customers, what should you do about it? Well, really, you should look at treating loyalty points in the same way as you do cash. I’d suggest that you screen every purchase that’s made with points, just as you would if they were being paid for by cash or credit.

During our webinar, we pointed out two or three things that you should consider right away. One of them was that you should look at some kind of account takeover protection service, so that you can screen any activity in accounts at critical points such as address changes, points transfer and so on. Another was to put something in place so that you can determine whether orders are genuine or not. You should also make sure you don’t limit yourself to looking at orders. Check out whether activities are fraudulent any and every time customers transfer or spend loyalty points or miles as well.

In my view, if you can successfully fraud screen loyalty programs, you’re likely to minimize the risk of your customers – and your business – losing out. Why not watch the webinar and discover how to reduce the impact of fraud on your business?

^¹Deloitte, Loyalty Data Security. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-aers-managing-the-risks-of-rewards-pov-singles-101614.pdf. North America

^²Op.cit.

^³https://www.entrepreneur.com/article/246902

^⁴ “Loyalty points fraud: A real risk for a virtual currency", Ryan Yuzon, Director of Consulting, RFi Group, April 30, 2015. https://www.rfigroup.com/global-retail-banker/news/loyalty-points-fraud-real-risk-virtual-currency.

Digital commerce is growing. Is your fraud management strategy...

Fri, 20 Oct 2017 16:29:25 -0400

Digital commerce is growing. Is your fraud management strategy keeping up?

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

Brick-and-mortar purchases may still account for the overwhelming majority of total retail sales, but there is no question that eCommerce has emerged as the true engine for retail growth. In the first half of 2017, while physical sales grew by less than 3 percent, eCommerce sales increased by 16 percent, according to the United States Census Bureau¹.

Behind the growth in eCommerce

What’s driving this growth? Well, a little bit of everything. New shoppers continue to feel more comfortable shopping online and in doing so increase transaction volume and put more into their online shopping carts. New online business models are also driving growth in eCommerce. In fact, total U.S. eCommerce sales are expected to grow by a whopping 64 percent from 2016 to 2020, advancing from $385 billion¹ to $632 billion².

Mobile commerce is also driving eCommerce growth, providing consumers the ability to purchase anytime and anywhere. According to our 2017 North American Online Fraud Benchmark Report, mobile commerce sales increased from 25 percent of total online sales in 2014 to 33 percent in 2016³. As mobile channels become more convenient – thanks to factors such as digital wallets, one-click checkout, connected devices that make up part of the Internet of Things (IoT) and more robust and secure mobile networks – mobile commerce has taken off like a rocket. BI Intelligence forecasts that mobile commerce could come to account for nearly half of all eCommerce sales by 2020².

Fraud is up, but loss rates hold steady

While the growth in eCommerce sales has been great for retailers, it’s been accompanied by a corresponding rise in online fraud. According to Experian, U.S. eCommerce fraud rates jumped by 33 percent in 2016⁴. Fortunately, despite that increase, overall fraud loss rates have remained essentially flat, at 0.9 percent in 2016 compared to 0.8 percent in 2015, as reported in our 2017 and 2016 North American Fraud Benchmark Reports^3,5.

The best way to keep your fraud loss rate stable, or even drive it down? Paying close attention to your fraud management strategies and continuously optimizing them to reduce both fraudulent orders and false positives among your legitimate customers.

Fraud management requires a deft hand

Fraud management can often seem like a balancing act. You have to guard against fraudulent orders while maintaining a positive customer experience and keeping operating expenses as efficient as possible.

Furthermore, overbearing fraud prevention policies can cost your business significant revenue. False positives lead to immediate lost sales, as well as a longer-term drag on loyalty and retention. According to Javelin Strategy, 30 percent of eCommerce shoppers stop returning to a merchant altogether following a false positive and order rejection. An additional 36 percent make fewer purchases than they had before the rejection⁶.

Fraud management is critical, particularly for online retailers, and a commitment to continuously improving your process can help you keep your fraud loss rate down, while simultaneously maintaining a positive experience for your customers.

Improving your fraud management approach

What can you do to improve your fraud management process? Your best option is to embrace new advances in online fraud detection. Data intelligence and sophisticated machine learning, paired with robust datasets, can lead to better transaction analysis. This in turn leads to better results and less of a manual review burden.

A fraud management solution should provide automated fraud processes powered by data intelligence, as well as rules you can manually tune to better suit your business or adapt to changing fraud patterns. Ideally, such rules optimization will also feature back-test capabilities that let you game out different strategies on past transactions before you deploy them.

Of course, you don’t have to start your search from scratch.

CyberSource – an established leader

Juniper Research routinely evaluates the fraud detection and prevention landscape, and has recently named CyberSource one of the established leaders in the category.

What sets CyberSource apart? First, the extent of our data intelligence network. Our Decision Manager platform leverages to draw on the more than 68 billion transactions processed annually by Visa and CyberSource. To this massive dataset, we apply advanced machine learning algorithms to find cause-and-effect relationships, and detect nonintuitive patterns, allowing us to extract and constantly update valuable insights to improve transaction analysis and verification. Furthermore, our rules-based engine helps ensure that you are the ultimate decision maker, with the flexibility to set and adjust rules at any time, then easily see what rules were triggered in any decision. Merchants can draw on standard rules and risk models, or customize their own, based on more than 260 fraud detectors, including device fingerprinting and IP geolocation.

Another useful feature of our Decision Manager platform is what we call Decision Manager Replay, the industry’s first fraud tuning analytics tool. With Decision Manager Replay, you can back test different rule sets and optimize your fraud management strategy over time.

You have many options when it comes to fraud management and prevention, and for the sake of your business, it is worth it to do your research. If you’re interested in exploring Juniper’s evaluation of CyberSource to determine if it may be a good partner in your fraud management process, click here to read the full report.

1. United States Census Bureau – Quarterly Retail eCommerce Sales – 2Q 2017 https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
2. Business Insider – Feb 2017
3. CyberSource 2017 North American Online Fraud Benchmark Report
4. Experian – Mar 2017
5. CyberSource 2016 North American Online Fraud Benchmark Report
6. Javelin Strategy – Overcoming False Positives – Sep 2015

Insights on Cross-Border Fraud from the CyberSource 2017 Online...

Fri, 15 Sep 2017 13:40:23 -0400

Insights on Cross-Border Fraud from the CyberSource 2017 Online Fraud Benchmark Report

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

In today’s digital economy, businesses are capitalizing on the increasing consumer use of computing and mobile technologies to expand sales across borders. According to the CyberSource 2017 North America Online Fraud Benchmark Report 2017 North America Online Fraud Benchmark Report, which surveyed 466 North American (U.S. and Canada) businesses, 54 percent of respondents accept orders from outside of North America. Those orders represented 16 percent of all their orders.

Unfortunately, it is tougher for many businesses to identify fraud for international orders. Businesses might not have knowledge of the latest fraud patterns in regions beyond their home country. Moreover, they might not understand typical digital purchasing behaviors of customers from those international regions. Without understanding these behaviors, many businesses would find it more difficult to identify unusual activity that might indicate an attempt at fraud.

The good news: Our report found that despite the challenges of managing cross-border fraud, many U.S. and Canadian businesses are reducing fraud-related losses. In fact, as successive North America Online Fraud Benchmark Report reports from CyberSource have shown, current fraud rates from cross-border orders are significantly lower than they have been in the past. The CyberSource 2017 Online Fraud Benchmark Report showed that only 0.9 percent of cross-border orders turn out to be fraudulent based on survey respondents.

Importantly, that is the same rate as domestic fraud. While the international fraud rate was previously two or three times as high as domestic rates, businesses today have now leveled the field between domestic and international orders.

Still, there is room for improvement. While losses are low, the rejection rate for cross-border orders is more than twice that of domestic orders, according to the CyberSource North America report. Results from the CyberSource 2016 UK eCommerce Fraud Report found that 62% of those respondents serving foreign markets experience higher fraud rates on cross-border orders. Businesses might be overly cautious in reviewing cross-border orders. However, if they continue to reject good orders, businesses might leave revenue on the table as well as slow customer growth beyond their domestic markets.

If your business is accepting cross-border orders, what can you do to reduce the rejection rate?

First, work with fraud management experts who are knowledgeable in each market you are considering entering. For example, CyberSource Managed Risk Services has teams of fraud management experts serving clients on five continents. These analysts can help you understand unique regional behaviors and identify emerging trends.

Second, implement regionally relevant best practices. The strategies and rules you implement for East Asia might not be as effective in South America.

In addition, analyze your chargeback activity to identify gaps in your cross-border fraud prevention strategy. Looking at activity by region can help you identify and address any region-specific patterns.

Finally, adjust your fraud scoring rules to reflect local markets. Understand the shopping patterns in different countries so you can apply the right fraud rules in each one. Better rules will help you more accurately identify potentially fraudulent transactions while accepting more good orders.

The digital economy offers tremendous opportunities for extending sales around the globe. While businesses have done well to reduce losses from cross-border transactions, they still need to improve acceptance rates for international orders. Bolstering in-house expertise with global specialists can help your business improve understanding of regional behaviors and enhance fraud detection efforts.

Read the full CyberSource 2017 North America Online Fraud Benchmark Report to discover more insights into how businesses are addressing today’s fraud management challenges.

Introducing CyberSource’s SAP...

Tue, 25 Jul 2017 11:13:09 -0400

Introducing CyberSource’s SAP Hybris Extension

Neil Caldwell, Vice President Europe, CyberSource and James Bullock, Sr Vice President and GM of Digital Services, Tacit Knowledge

In an industry that must innovate as quickly as consumer preferences change, digital commerce professionals are continuously updating their sites to make the back-end as efficient and feature rich as possible – while providing an unparalleled customer experience on the front-end.

That’s the driving force behind CyberSource’s latest developer toolkit, created for businesses using SAP Hybris to power their eCommerce sites. Built in partnership with Tacit Knowledge, a Newgistics company, the pre-built integration provides a configurable toolkit that helps shorten the implementation cycle, reduce system development and maintenance costs, and provide for smoother upgrades and simpler maintenance.

By developers. For developers

Now Gold Certified, the extension is built using a microservice architecture, which makes it easier for developers to work with different components of the CyberSource solution, plus multiple accelerators and storefronts from SAP Hybris. The integration solution puts you at the center of the connected digital world – providing seamless customer experiences across multiple channels, and maximizing opportunities for conversion and growth on a global scale.

Seamless cross-channel experience

Designed to meet specific business requirements, the integration includes CyberSource’s core payment and fraud management solutions, helping you to:

Access international markets quickly, safely and cost-effectively
Streamline the checkout process, increase sales conversion, and improve the customer experience across channels and devices
Accept more genuine orders by implementing effective fraud management strategies
Track and reconcile payments with flexible searching and comprehensive reporting

We’re proud of the combined experience the Tacit Knowledge and CyberSource teams bring, together delivering an exceptional SAP Hybris integration.

Find out more

For more details on the integration features, see our overview.

Request your CyberSource SAP Hybris Developer Toolkit
Find out how Tacit Knowledge can help with digital commerce development and integration projects here.

Mobile Insights from the CyberSource 2017 Online Fraud...

Tue, 18 Jul 2017 16:01:06 -0400

Mobile Insights from the CyberSource 2017 Online Fraud Benchmark Report

Focusing on the Mobile Channel: Improving Fraud Management by Distinguishing mCommerce from eCommerce

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

Mobile commerce (mCommerce) is on the rise. As consumers increasingly use their smartphones and tablets to make purchases, businesses are ramping up mobile support and capturing more revenue through the mobile channel. According to the CyberSource 2017 North America Online Fraud Benchmark Report, 61 percent of survey respondents currently support a mobile channel. The percent of revenue originating from mobile devices has increased from 25 percent in 2014 to 33 percent in 2016.

Maybe not surprisingly, as mCommerce grows, so does the potential for fraud in the mobile channel. Fraudsters are eager to exploit new techniques in mobile before businesses can bolster their fraud management strategies.

How significant is fraud for the mobile channel compared with other eCommerce channels? The 2017 findings show that fewer than half of respondents track mobile fraud as distinct from other types of fraud. But for those that do track mobile fraud, the percentage of eCommerce losses from the mobile channel are only slightly below the loss percentage from the web channel.

With web store and mobile fraud rates nearly equal, some businesses might be persuaded to continue to lump mobile fraud with all eCommerce fraud. But they should reconsider. There are several important reasons to separate the mobile channel from other eCommerce channels for fraud management.

First, consumers often behave differently when using mobile devices compared with PCs. For example, they tend to buy fewer items and linger less when using a mobile device. Or they might typically start purchases using a PC at work, browsing among a number of items and placing items in a shopping cart, but then complete purchases using a tablet at home. Because fraud detection rules often attempt to spot abnormal behavior, businesses must accurately identify normal behavior for each channel to maximize the effectiveness of rules and minimize the need for manual review.

Second, distinguishing mobile from other eCommerce channels enables businesses to implement channel-specific strategies, rules, and tools. The CyberSource survey shows that 91 percent of respondents use the same fraud management tools for mobile and web channels. But those businesses might be missing important opportunities to capitalize on solutions more finely tuned for each channel.

Third, examining the mobile channel separately from other eCommerce channels lets businesses collect the wealth of data uniquely generated by mobile devices. That data can help significantly improve fraud detection. Analyzing device type, location information, and other information can help businesses improve risk assessments, spot anomalies, and hone rules.

Finally, separating mobile from other eCommerce channels can help businesses better evaluate the effectiveness of fraud management strategies. By conducting channel-specific reporting and analytics, businesses can gauge how well rules and solutions are working in each distinct environment.

Consumer use of mobile devices continues to grow. As businesses focus more resources on supporting the mobile channel, they should consider tracking mobile fraud separately and applying distinct fraud management strategies. Doing so will enable them to further reduce fraud losses and enhance the efficiency of fraud management.

Read the full CyberSource 2017 North America Online Fraud Benchmark Report to discover more insights into how businesses are addressing today’s fraud management challenges.

My Takeaways from the Travel Fraud...

Fri, 28 Apr 2017 05:26:21 -0400

My Takeaways from the Travel Fraud Symposium

Denise Burkett, Omni-Channel Payments and Fraud Specialist, CyberSource

I love industry events. I love sharing insights into the hottest issues in the industry with like-minded experts, and I find the lively discussions that happen around the panels and workshops just as riveting as the scheduled events. The Travel Fraud Symposium, (21st February in London) is no exception – well worth the early start from my home in Birmingham.

Two issues came up repeatedly in conversations with fellow speakers and delegates, at the Symposium. First: which areas should organizations focus on to most effectively combat fraud in the travel sector? And then second: what tactics are travel companies already using?

Better Fraud Management

If you’d told me when I was younger that I’d be able to buy things online without entering my card details every time, I’d never have believed you. But by storing payment and account details on file to smooth checkout, merchants have made it a reality. Sadly, the convenience of this development is tempered by the risk associated with account takeover fraud – when a cybercriminal exploits a victim’s personal information stored with a merchant in order to take control of an existing account or establish a new account – and goes on to use that account to carry out unauthorized transactions.

Loyalty fraud is also on the rise: 90% of airlines, hotel chains and other travel businesses have suffered fraud in their loyalty program [1], and those loyalty programs are projected to hold $238 billion. [2] To me, loyalty points are no different to money – they help me buy my shopping, or flights for a holiday. So if your loyalty program is defrauded, your customers will likely react just as they would if you’d been hacked and their payment data had been stolen.

Growing mCommerce

Finally, consumers today use multiple devices to make purchases – including mobiles, tablets, desktops, even kiosks in some countries. I own five mobile devices, and use them all to buy things online at different times. This change in customer behavior makes it harder for companies to tell genuine customer behavior from fraudulent.

Without being better able to identify customer behavior, you may find more genuine customers are rejected by your fraud screening systems, and more fraudsters slipping through your net. And of course, if your customer’s experience and your reputation as a secure merchant decline, customers may defect to your competitors. It’s top of mind for many businesses: clean fraud was the biggest concern in our 2016 eCommerce Fraud Report. [3]

How able are you to combat these trends? Start by asking yourself these questions:

1. With what level of control can you monitor suspicious account activity (both for customer accounts and loyalty accounts)?

2. How confident are you that customer data is safe with you?

3. How well are you able to identify genuine – and fraudulent – customer behavior?

If you are unable to answer – or your answers don’t inspire confidence – it’s time to take a multi-layered approach to managing fraud.

Successful Tactics

A multi-layered approach monitors account activity from the moment an account is created, right through to payment, and combines all available data to identify genuine and fraudulent behavior. The result: you can help reduce fraud at all stages, and help protect your customer and loyalty accounts on file.

Ideally, you’d also create and test new automated screening rules in real time, to respond faster to emerging trends and help reduce costly manual review.

For me, the range of questions themselves shows just how interested travel companies are in tackling these challenges. After all, I wasn’t the only one putting up with an early start and long commute to come and discuss them! But multi-layered fraud management isn’t just useful for the travel sector. Really, anyone with a loyalty program, whose customers are engaging with them in new ways and through a variety of devices, need to embrace a holistic approach to fraud management.

The opinions, views and positions expressed in this blog reflect those of the author and not necessarily those of CyberSource.

[1] CyberSource Loyalty Fraud Report 2016. Based on survey conducted by Airline Information in partnership with CyberSource. Conducted between September – November 2016.

[2] “Loyalty points fraud: A real risk for a virtual currency”, Ryan Yuzon, Director of Consulting, RFi Group, April 30, 2015

https://www.rfigroup.com/global-retail-banker/news/loyalty-points-fraud-real-risk-virtual-currency

[3] Source: http://bit.ly/2m3rHY4; pg 24, FIG: 14

The 2017 North American Online Fraud Benchmark Report: Continued...

Thu, 27 Apr 2017 12:12:24 -0400

The 2017 North American Online Fraud Benchmark Report: Continued Success in Fraud Management Will Require Persistence

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

The 2017 Online Fraud Benchmark Report from CyberSource is here, and it contains some good news: many businesses in the United States and Canada are succeeding in their ongoing battle against fraud. The challenge now is to be persistent. As eCommerce and mCommerce continue to grow, businesses should not relax their efforts to combat evolving threats while delivering a strong online customer experience and controlling operational costs.

For this 17th annual benchmark report, we received survey responses from 466 businesses, including CyberSource customers and non-customers from both the United States and Canada.

Among the report’s key findings:

Card-not-present levels were stable, with a fraud rate of 0.9 percent.
On average businesses rejected 2.9 percent of domestic orders due to suspicion of fraud, just 0.1 percent above the previous year’s metric.
On average, businesses send 25 percent of their orders for manual review. Those businesses ultimately accept 89 percent of orders following manual review.
Approximately 61 percent of survey respondents currently support a mobile channel. However, fewer than half of survey respondents who support mobile channel, track fraud in mobile channel as distinct from other channels.

Still, there is important work ahead. For example, manual review continues to remain prevalent among the survey respondents. To reduce costs, many businesses might need to refine their fraud strategies and screening processes with the goal of sending fewer orders to manual review. In addition, tracking mCommerce separately from other eCommerce channels could help businesses improve the effectiveness of mobile fraud management.

Learn More
Read the full report to learn more about the important trends and challenges facing North American businesses. See what tools are working for other businesses, benchmark your strategies against your peers, and tap into insights that can help improve fraud management.

What Merchants Should Know: Insights into Gamers and...

Wed, 22 Feb 2017 19:50:53 -0500

What Merchants Should Know: Insights into Gamers and Millennials and the Future of Digital Commerce

Emma McDonald, Marketing Director at Newzoo

With smartphone-enabled digital payment services becoming increasingly popular around the world, the traditional landscape of the consumer payments market is changing more rapidly than ever. This white paper from Newzoo and CyberSource offers insights into how gamers and Millennials are driving this change in many countries around the world, and what merchants can do to engage and retain these valuable and actively mobile audiences. The research in this whitepaper comes from one of the most comprehensive studies of payment preferences and behavior on a global scale, involving 25,000 respondents in 19 countries.

Gamers and Millennials are at the forefront of Innovation
As smartphones assume a more central role in the lives of consumers everywhere, the mobile app market continues to expand, bringing with it an entirely new set of alternatives to the traditional payment methods. No longer limited to carrying cash or bank cards, the prevalence of mobile apps and mobile wallets such as Apple Pay, Android Pay, PayPal, Visa Checkout, WeChat Pay, Alipay and others around the world have caused a shift in the way consumers think about making purchases. At the forefront steering this shift are two groups: gamers and Millennials (consumers aged 18 to 35).

These groups are not only using mobile digital payments on a regular basis, but are also showing a growing preference for these options over traditional behaviors. In North America for example, 57% of first-generation Millennials (aged 26-35), would prefer to use mobile digital payments if they were available as opposed to more traditional methods like pulling out their debit/credit card and inserting into the POS terminal or typing the account number in the online checkout form. Consumers in Europe and APAC show a similar pattern with adoption and preference for new payment technologies highest in the APAC region.

Traditional Gaming Elements in the Shopping Experience
When it comes to digital media, nothing monetizes and engages consumers, especially Millennials, as well as gaming. In fact, Newzoo’s Global Mobile Market Report shows that 80% of all global app revenues this year will come from spending on games. For this reason, we also examined consumers’ preferences and attitudes toward the application of traditional gaming elements into their shopping experience. We found that consumers of all ages, and Millennials and gamers in particular, are more likely to shop at a store that applies gaming elements such as visual navigation, comparing purchases with friends, and offering loyalty/experience points.

Merchants and retailers looking to succeed in the next wave of digital commerce should pay close attention to what these influential consumers have to say. Over the years, younger generations of consumers have been shown to embrace new technology more readily than their older counterparts and, generally, this behavioral trend holds true when it comes to the latest advances in the world of retail purchasing and payment decisions.

To learn more, read the full whitepaper.

The digital economy demands a new approach to fraud...

Wed, 21 Dec 2016 06:52:10 -0500

The digital economy demands a new approach to fraud management

Andrew Naumann, Vice President, Product Management - Merchant Solutions, CyberSource

To capitalize on new sales opportunities and meet customer expectations, almost every business today is building out its digital channels. Businesses are committed to streamlining online purchasing while maintaining a consistent customer experience.

Many of the same innovations that are driving the digital economy forward are also creating new fraud management challenges. For example, fraudsters are developing different ways to take over customers’ online accounts and use stolen credit card information to make fraudulent purchases.

The increasingly prevalent account on file (AOF) eCommerce model presents a fraud management hurdle. With the AOF model, businesses store account information for repeat customers, helping to accelerate checkout. A customer account might include credit card information, home address and phone number, and even addresses and phone numbers of friends and family. The business must protect that account on an ongoing basis, not only at the time of a transaction.

Traditional fraud models are inadequate

To remain competitive, businesses need to rapidly respond to evolving customer expectations and deliver engaging experiences. But at the same time, should consider adjusting fraud strategies to better defend customers and the business against new threats.

Traditional fraud management solutions are often inadequate to address today’s fraud threats. Point solutions, which focus on a single threat or capability, are not designed to protect against the full range of fraudulent activity. Moreover, many traditional solutions have a single focus on minimizing the direct losses caused by fraud and do not address the need to balance fraud risk with operational costs and the customer experience.

Businesses need a holistic approach—one that begins by reducing the threat of fraud when the customer first establishes an account and continues all the way through the moment an online transaction is approved. By implementing a multi-layered approach to fraud management, businesses can maximize the effectiveness of fraud prevention while controlling costs and delivering an exceptional customer experience.

A holistic approach to fraud

A multi-layered fraud management system offers a holistic approach that can help reduce fraud at each stage of the customer buying process, while helping to control costs and minimize the impact on the customer experience. Each layer can help thwart fraud and identify good customers, so businesses can make a better decision about accepting or rejecting a purchase.

Optimization is a process, not an end state. Collecting information, tracking trends, and testing new rules are key to effective ongoing fraud management. As fraud and the digital economy are rapidly changing, your business’ fraud management strategy will benefit from continuous evaluation and adaptation.

Staying competitive in the continuously changing digital economy

The digital economy is dramatically changing how consumers shop and interact with businesses. To stay competitive, businesses must embrace these changes. They need to open new digital channels and deliver fast, convenient and engaging digital experiences.

At the same time, many businesses will also need to re-evaluate their approach to fraud management. They need a holistic approach that can address the new risks ushered in by the digital economy without introducing excessive operational costs or placing too many obstacles in front of customers.

Check our website www.cybersource.co.uk/detectprotect to find out more about the new approach to fraud management.

Why Satisfying Gamers & Millennials is Critical to Your...

Fri, 21 Oct 2016 13:29:33 -0400

Why Satisfying Gamers & Millennials is Critical to Your Success

Robb Lewis, Senior Director of Solutions Marketing, CyberSource

Given the constant stream of new, nimble and niche competitors that now have a platform to your customers through their smartphones, there’s never been a more important time to demonstrate how well you understand the needs of the most important segments within your customer base. Success can hang on which segments you focus on and how you respond to their needs.

No doubt, for example, you’re thinking a lot about how best to engage millennials (the importance of which we’ve covered in a previous blog post).

But are you also thinking about gamers?

As in: people who play ‘video games’ — which today would include dedicated console and computer games, and games designed for mobile devices. Of course, there are casual gamers, hardcore gamers, e-sports gamers and everything in between.

Why Consider Gamers?

Why should you be thinking about gamers? Well, in 2015, there were a reported 203 million gamers across North America. These gamers spent $23.8 billion dollars on mobile, PC and TV/console games. And that year, worldwide, more than 1.9 billion gamers accounted for $91.5 billion in total gaming spend – up 9% year-on-year.1

In other words, gamers form a large and growing market segment: a group with a lot of disposable income. Gamers cut across both millennial and Gen-X demographics and are almost certainly a significant portion of your customer base.

If you want to attract their spending power to your business, this is a segment well worth understanding and engaging with. And it’s worth mentioning that technology-loving gamers have often been trendsetters for the expectations of millennials. If millennials look to gamers for what’s new and cool, then understanding the preferences of gamers can also help to attract millennials.

Deepen Your Understanding

To give you deeper insight into the behaviors and expectations of millennials and gamers (both millennial and non-millennial gamers), and to help you understand what that means for you as a merchant, we commissioned Newzoo to conduct a survey of 16–50 year olds across North America, Europe and Asia Pacific select countries. As our analysis revealed some striking patterns within the millennial segment data, we’ve then also broken this group down into two key sub-segments: first-generation millennials aged 26–35, and second-generation millennials aged 18–25.

I think our survey data will help you to deepen your understanding of both gamers and millennials and help you to offer them the digital and mobile experiences they expect. It should also help you to improve your overall brand engagement with both of these influential consumer segments.

Join Our On-Demand Webinar to Learn More

We hosted a webinar with Newzoo to present this survey data and explain how you can use it to attract and retain digitally savvy customers.

During the webinar we answered the following questions:

What are the critical services that gamers and millennials most expect from online merchants?

How important is the mobile phone to these groups when making purchases?

What’s the effect of offering different payments methods on the choice of merchant for these segments.

Watch the webinar now.

[1] Newzoo, Global Games Market Report, 2015

CyberSource enables merchants to easily accept Apple Pay on...

Thu, 22 Sep 2016 15:52:42 -0400

CyberSource enables merchants to easily accept Apple Pay on their websites including a no-code configuration for Demandware Clients

With CyberSource, merchants now have a simple way to offer Apple Pay so their customers can make easy, secure and private payments on the web with a single touch

Apple Pay on the web has been fully integrated with the CyberSource payment management platform and is ready for merchants to enable on their websites in time for the holiday shopping season. Merchants can implement Apple Pay in their apps and now on the web, all through the same CyberSource API. Demandware, a Salesforce company, has enabled retailers operating on the Demandware Commerce Cloud to quickly add Apple Pay on the web as a payment option for their customers via a simple, no-code configuration so they can begin making easy, secure and private payments.

Consumers are using their smartphones to perform many daily activities – including shopping and payment. 82% of smartphone owners use their phones in store to assist and advise while shopping1 and Apple iOS users spend about 50% more than the average app-enabled purchase2,3. “The trends clearly indicate that consumers actively use their smartphones as a trusted assistant during their shopping experiences,” said Andre Machicao, SVP of CyberSource, a Visa Inc., company. “Both CyberSource and Demandware share the goal of helping retailers eliminate friction from the checkout process. Our simple, no-code solution for Apple Pay on the web enables Demandware retailers to quickly and easily make this convenient and secure payment option available to their customers.”

“Enabling our retail clients to deliver excellent consumer experiences is a key focus for us,” stated Tom Griffin, senior vice president of corporate development at Demandware, a Salesforce company. “CyberSource, a Demandware Partner of the Year, has long been a key component of our customer experience strategy. The new CyberSource Apple Pay for the web integration to the Demandware Commerce Cloud enables our clients to easily bring to market this exciting new, innovative shopping experience.”

CyberSource is among the first payment providers to support Apple Pay on the web. Online merchants already provisioned with a CyberSource account need only to code to the CyberSource API’s. CyberSource clients on the platform should contact Demandware for configuration instructions, and Demandware clients not yet having a CyberSource account should contact CyberSource to establish an account.

Security and privacy is at the core of Apple Pay. When you use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your device. Each transaction is authorized with a one-time unique dynamic security code.

Online shopping in apps and on websites accepting Apple Pay is as simple as the touch of a finger with Touch ID, so there’s no need to manually fill out lengthy account forms or repeatedly type in shipping and billing information. When paying for goods and services on the go within apps or Safari, Apple Pay works with iPhone 6 and later, iPad Pro, iPad Air 2, and iPad mini 3 and later. You can also use Apple Pay in Safari on any Mac introduced in or after 2012 and confirm the payment with iPhone 6 or later or Apple Watch.

Sources:
1- Think with Google - Google Analytics, retailer aggregated data, U.S., Mar. 2016 - https://www.thinkwithgoogle.com/articles/5-ways-consumers-connect-stores-mobile- shopping.html

2 - http://www.androidauthority.com/new-report-reveals-that-ios-users-spend-2-5-more-on- in-app-purchases-than-android-users-700983/

3- http://www.techinsider.io/ios-users-spend-more-than-android-users-2015-12

International Airlines Group and CyberSource Develop a...

Thu, 22 Sep 2016 14:02:18 -0400

International Airlines Group and CyberSource Develop a Long-Standing Partnership

Neil Caldwell, VP, CyberSource Europe

It’s nice when a valued customer trusts and relies on you, year after year after year. Especially because nothing stands still in our fast-changing world of payment and fraud management. Technologies change and customer needs change: both call for flexibility in continuing a successful relationship. And sometimes the results are gratifying in unexpected ways.

The Benefits of Scale
For the past 15 years we’ve provided services to British Airways. With the contract up for renewal its parent company - International Airlines Group (IAG) - approached us looking to offer CyberSource services to Iberia, Vueling and Avios, which are also part of IAG (the Group).

As Iberia was an existing CyberSource customer, this was partly about consolidating the individual agreements we had with IAG, and about extending services to other parts of the Group.

Supporting Flexibility
We quickly realized that an important factor for IAG was that they didn’t want to dictate the specific services that the companies would use. IAG wanted their subsidiaries to be able to choose the mix of services that suited them, given their deep knowledge of what worked best in individual markets.

So a one-size-fits-all approach wasn’t suitable. Instead we built a contract that made our suite of payment and fraud management services available to all the companies within the Group on an a-la carte basis.

In this way we could give IAG both volume pricing benefits and the flexibility they needed. So I’m delighted to announce that the Group has signed a new three-year agreement with us.

Getting Together in Unexpected Ways
The benefits to IAG go further. Availability of the CyberSource fraud management platform across the Group has served to share expertise and best practices more broadly, helping enable these areas to be addressed even more effectively.

In addition, standardized pricing for payment and fraud management services has simplified reconciliation and reporting between individual companies.

We’re delighted to be extending our partnership with one of the world’s largest airline groups and look forward to working closely with IAG for many years to come.

More on IAG
International Airlines Group is one of the world’s largest airline groups with 541 aircraft flying to 274 destinations and carrying almost 95 million passengers each year. It is the third largest group in Europe and the sixth largest in the world, based on revenue. Formed in January 2011, IAG is the parent company of Aer Lingus, British Airways, Iberia and Vueling. For more details on IAG see: www.iairgroup.com.