Mobile & Cross Channel Payments

How to Build Millennial Engagement and Strengthen Brand Experience

Michael Marx, Senior Director of Insights, Visa Inc.

Quick question: Out of the Baby Boomers, Generation X, and adult Millennials, which has the highest median U.S. household income?

Answer: it’s adult Millennials – not the Boomers, or Generation X.

As a merchant, I’m sure you’re well aware of the growing economic importance of Millennials. After all, they’re the largest demographic in U.S. history. So I’d like to share with you here some of our insights into how you can attract and engage this target market, based on our experience and the latest research.

The Smartphone Epicenter
Of course it all revolves around the smartphones, tablets and smart devices that are almost permanently glued to the hands of Millennials (and some other generations too!).

This device is simply the core of their world. And this reality profoundly conditions their expectations of consumer brands.

Whether they’re texting friends, shopping, transferring money, posting to social media, or consuming content, Millennials just expect to be able to do so on their smartphones. Immediately.

Which means to be in their world, you have to be on their smartphones too.

Content and Entertainment
Millennials’ uses of content and entertainment services are also different from those of other generations and so, to capture their attention, you have to account for this in your marketing activities.

Because they’re more likely to be posting on Instagram, watching YouTube or eSports, playing video games or having conversations on Snapchat than they are to be reading a print magazine or watching traditional broadcast TV.

Experience Trumps Stuff
And compared with previous generations, Millennials place a much greater emphasis on experience over material possessions. Which means that every touch-point you have with them needs to contribute positively to their experience of your brand. Simply having a great product isn’t enough.

This is doubly important given that Millennials are capable of writing a negative review if they don’t have a good experience of your brand online.

Diversity
It’s also important to remember that Millennials are an incredibly diverse demographic – on some measures more so than any previous generation. So all of the above is simply table stakes. You can’t just ‘target Millennials’. You’ve still got to nail your customer segmentations.

Webinar
I’ve shared a ton of research we’ve gathered into the attitudes, interests and behaviors of Millennials on our recent webinar, “The Millennial Tsunami: The Great Disrupters?”  On the webinar I cover how you can provide the experience they expect. And I describe what their key needs are in relation to payments.

Listen to the webinar to learn:

• How do the attitudes and expectations of Millennials differ from previous  generations?
• What are the differences in how Millennials consume content and entertainment services?
• What devices do Millennials prefer using when making online payments?
• What are Millennials’ awareness and usage levels of mobile payments methods such as Apple Pay?
  
  

Click here to watch the on-demand webinar, “The Millennial Tsunami: The Great Disrupters?”

Android Pay In-App API Available to U.S. CyberSource Merchants

Andre Machicao, SVP, CyberSource

Since its introduction earlier this year, Android Pay has been a popular mobile payment option in stores among U.S. consumers. Today, Android Pay is expanding to enable payments in-app and offering an API to accept Android Pay for merchants in the U.S.

As a CyberSource merchant, you can now quickly integrate Android Pay in your apps. This will allow your customers who prefer Android Pay to have a simple, secure way to pay for services and goods directly from your apps on their Android devices.

By integrating Android Pay in your app, your customers can simply tap Android Pay purchase button and complete their purchase. The “button” integration is simple: developers can visit our website to access the API and quickly add Android Pay as a new in-app payment option for their customers. CyberSource offers multiple implementation options so developers can choose the best one for their environment.

We are here to help answer any questions you may have and work with you through the integration process so you can make Android Pay part of your simpler, faster in-app payment experience that turns shoppers into loyal repeat customers.

2015 Money20/20 Hackathon: Who Knew Payment Could Be So Cool!

Brian McManus, CyberSource, Director of Product Management

We took the beta CyberSource REST payment API to the Money 20/20 Hackathon last week, hoping it would inspire developers. And boy, did it!

With heaps of creativity — and a little help from a soldering kit — one of the teams using the new CyberSource API was shortlisted as a finalist; and gave us all something to think about for the store of the future.

Next-Generation APIs
The Hackathon was part of the Money20/20 global conference for payments and financial services innovation. Visa was among ten sponsors challenging developers to innovate with their APIs during the 24-hour hack. You can read more about the Hackathon here.

Participants had a sneak preview of the CyberSource REST API and new SDK. The Visa and CyberSource team worked one-on-one with developers to help them bring their inspiring ideas to life.

A New Take on an Age-Old Problem
No-one visits a store to stand in line, or to make a payment. These are just means to the end of acquiring chosen goods. The four-strong team calling themselves PlentyPOS re-imagined in-store payment with a line-busting solution, using both Visa Checkout and CyberSource payment services.

The team shrank an NFC contactless reader to fit inside a security tag of the sort usually attached to clothing (which, in case you were wondering, is where the soldering kit came in).

They also built an Android app that would let you hold a smartphone against such a tag to buy the item and release it from the tag.

The app was designed to collect details about the purchase and purchaser via Visa Checkout and transmit them to the store’s point-of-sale server, which communicates with the CyberSource payment gateway to complete the payment. Once payment is complete, confirmation details are sent back to the tag to disengage its security. Our shopper then removes the tag (leaving it at a collection point by the door, for example) and heads home with his or her purchase.

Re-Thinking the In-Store Experience
We liked the PlentyPOS entry for so many reasons:
• It was so creative — in its use of both hardware and software.
• It captured the spirit of Money20/20 and the reason we were there: to foster innovation for connected commerce and show how mobile, retail, and payment technology intersect to benefit consumers and retailers.
• It captured the spirit of those born in the digital age: mobile-first and omni-channel by default.

And we loved its ambition. Imagine the joy of consumers if they no longer have to wait to pay. Imagine how much more easily retailers could turn browsers into buyers. Imagine the space saved and staff freed by making payment mobile within stores.

All’s Well that Ends Well
After a crash-course in payments, round-the-clock coding, and their two-minute pitch, the PlentyPOS team members were tired but happy. Unsurprisingly they made the final; and they left with Apple Watches in recognition of their great work.

CyberSource and Verifone: Driving EMV Chip Value for You

Adam Williams, Strategic Alliance Executive, CyberSource

Back in June, we announced that we’d joined forces with Verifone, a leader in point-of-sale (POS) payment, to accelerate omni-commerce globally. As this partnership is something I’ve worked on closely, I want to explain what it means for customers, particularly around the migration to EMV chip.

In short, Verifone is connecting its POS gateway to CyberSource’s global payment management gateway. For you, this makes accepting payments and managing fraud and security across channels a lot easier.  Plus, you get a complete view of customer activities and consolidated reporting in the back end. When it comes to EMV chip, the partnership of CyberSource and Verifone drives even more value —particularly around the cost and speed of adopting chip.

Saving Time and Money in EMV Chip Adoption
EMV chip is an end-to-end process that requires certification from acquirers for every part of the solution, for every card brand. But merchants have a choice: you can implement either a fully-integrated or semi-integrated chip solution:

• With a fully-integrated solution, everything is in scope for certification: the four main elements and the connections between them. That’s the card terminal, cash register, order management system and anything that connects to the acquirer.
• With a semi-integrated solution, certain elements are removed from scope: the cash register, order management system and any middleware that is connected to the Acquirer. The remaining elements can be pre-certified with acquirers in most cases, allowing you to streamline your EMV chip project, increase efficiencies and speed-to-market, and reduce costs.

The primary EMV chip solution we’ve implemented in partnership with Verifone is a semi-integrated one. The terminal interfaces to the cash register only for command and transaction response information. It then connects directly to the cloud to process chip and payment data.

As the cash register, order management system and any associated middleware never see chip or other sensitive cardholder data, this helps to remove them from the scope of both EMV chip and PCI DSS certification. You can then focus your efforts on terminal integration (to and from the cash register) and ’re-terminalizing’ your estate.

Our solution provides consolidated data from multiple acquirers, channels and countries through our payment gateway, which saves a lot of time in reconciliation and payment-related admin. Acquirer connections are being added in a phased manner.  Contact CyberSource for the latest schedule.

Join Us to Find Out More
To find out more about our partnership with Verifone and how we’re driving EMV chip and omni-channel value for you, register for our on-demand webinar “Get Ready for EMV Chip Cards”.

Five Steps to Streamlining EMV Chip Adoption

Adam Williams, Strategic Alliance Executive, CyberSource

With the US EMV chip liability shift effective from October 1, 2015, it’s no wonder that E-M-V are the three letters on everyone’s lips. When I meet with businesses making chip plans, I realize that there’s sometimes misunderstanding or uncertainty about the change and its implications, which may detrimentally impact decision-making about EMV chip adoption.

So I thought it would be worth clarifying the situation with my top tips for chip migration.

1. Audit your POS infrastructure
Unless you have a stand-alone, plug-and-play payment terminal, chip adoption is not as straightforward as replacing old terminals with new ones in a standard way.  The most difficult part of the shift to EMV chip is the effort to integrate the POS systems to the terminals for the new chip processing. The only way to ensure a smooth transition is to start by understanding what modifications will be necessary for your infrastructure.

2. Consider a phased migration
Businesses are not mandated to deploy EMV chip terminals and can still accept magnetic stripe payments after October 1, 2015. The difference is that you may bear the liability for counterfeit transactions, if the card used was a chip card and it was not processed as such.

I advise merchants to take a pragmatic, risk-based view on chip migration, consistent with their transaction patterns and business objectives. Consider a phased approach. Install EMV chip terminals and stress-test the end-to-end process in selected stores, before applying chip across an entire terminal estate.

3. Choose your solution approach
EMV chip is an end-to-end process that requires certification from acquirers for every part of the solution, for every card brand — and this can be time-consuming. Fortunately there are solutions that allow you to skip some of these certification requirements, and I recommend taking this approach to simplify and speed up migration. I’ll cover this aspect in more detail in a follow-up blog on the subject.

4. Implement end-to-end encryption
EMV chip is not the panacea for all data security ills. It can narrow PCI DSS scope in some cases (which I’ll explain in my follow-up blog article), but by itself does not protect sensitive cardholder data from compromise. Since EMV chip is not an encryption standard, I always advise businesses to take the opportunity to implement end-to-end encryption as part of any chip migration project.

5. Train your staff
EMV chip transactions flow in a different process from Mag Stripe swipes. Customers may initially swipe their card but be prompted to insert their card to complete the transaction. Your staff will need to be educated as to why this happens and what they need to do when this happens. Card reads can take longer than Mag Stripe swipes, and customers may rush off and leave their cards in the terminal. Additionally it’s important for customer service and dispute management that EMV chip data is shown correctly on card transaction receipts and stored with the transaction.

CyberSource EMV chip solution
It won’t surprise you to hear that the CyberSource EMV chip solution, developed in partnership with Verifone, is designed to address many of these issues: minimizes the certification requirements and PCI DSS scope, and encrypts transaction data end-to-end. Watch for my next blog article, which will cover some of these characteristics in more detail.

Join our live webinar to learn more
To find out more about our partnership with Verifone and how we’re driving EMV chip and omni-channel value for you, register for our on-demand webinar Get ready for EMV chip migration…

Most interesting change isn’t in technology

Neil Caldwell, Vice President of European Sales, CyberSource

It has been twenty years since the founding of Amazon (and other eCommerce companies like CyberSource) and the beginnings of eCommerce as we know it today: a good time for reflection.

We’ve come a long way
Technology never stands still, and there have been a lot of changes, some evolutionary, some almost revolutionary. Clearly one-click ordering and digital wallets have been important developments, and in recent years it’s been all about the growing scramble in the mobile payments space.

But, for me, the most interesting change isn’t in technology. It’s actually in the attitude and approach of merchants to payments. In the early years, payment management was just a functional step in the process with little to no special importance. It had to work, but customer convenience and user experience was less of a concern, not least because the numbers were small.

Today the numbers are huge and they matter all the more. You can’t afford to have customers “bail on you” at the point of payment. Now, merchant payment decisions about payment choices are driven by customer experience and expectation, and have a direct effect on conversion and market share.

The payment experience has become part of the brand experience, especially in the mobile channel. For many merchants, the user experience, the brand experience, is a key differentiator. Don’t forget, the increase in eCommerce has also led to increased focus on costs and fraud management, which is where companies like CyberSource have a role to play.

Mobile payments are big news
Mobile payments excite me and we’ve seen some significant announcements by key consumer brands and financial institutions in recent months and weeks. For me, I think the genuinely innovative development is the network tokenization, an innovation by the card networks, which creates the technical foundation for secure mobile payments.

Network tokenization is a big step forward in payment security and convenience, and that’s important for consumer acceptance of mobile payment technology. But let’s admit it, when we’re talking about capturing consumer awareness and interest, it’s hugely significant that consumer brands and financial institutions are leading the charge.

For the first time, I believe we may have a payment technology in the all-important mobile channel that could become the global standard, precisely because both the card networks and big consumer brands and device manufacturers are involved. From a European perspective, which is where I focus my activities, this would be particularly valuable. Europe has always been challenging for eCommerce because merchants have to cater to so many differences across countries. I think anything that encourages similar behaviors, standards and systems is good for the European market.

You can follow Neil Caldwell, Vice President of European Sales, on Twitter at @paymentology.

Time to get mobile-friendly behind the scenes

Sean Mathé, CyberSource: The mobile channel is no longer an issue for the future

Google has begun attaching a ‘mobile-friendly’ label to its search results for websites that cater well to mobile device users. This is a wakeup call for those who haven’t yet fully come to terms with the fact that the mobile channel is no longer an issue for the future; in the US, at least, the number of searches that Google is seeing from mobile devices is exceeding those from desktops and laptops (1).

Taking a leaf out of Google’s book, I have got my own 'mobile-unfriendly’ warning to give to the world’s fraud managers. We know, from conversations with customers and from independent research, that around a third of online businesses don’t even track payment fraud from the mobile channel, and that of those who do, the vast majority don’t have distinct fraud management strategies for the mobile channel (2).

Warning: your fraud management is not mobile-friendly

Even if a business has not (yet) created a mobile-friendly website, I would be surprised if they don’t understand why mobile-friendliness is an issue.

When it comes to fraud management, however, many of the people I talk to don’t really appreciate that there are differences between mcommerce and ecommerce that call for distinct strategies for the two channels. They seem so similar, after all: you’re using a computing device and the same payment methods - why should it make a difference whether the device is mobile or not?

But it does make a difference. When a customer uses a mobile device - smartphone, tablet, phablet - rather than a computer to buy from you, there are differences in their behaviour, in the data you can collect, and in the fraud pressure that the transaction may be subject to. These differences matter, because fraud management is only effective insofar as we understand what constitutes normal buying behaviour, and use data and tools that can help us distinguish between this behaviour and irregular behaviour that may indicate fraud.