Visa Inc. · NYSE:V
Visa — Webinar: Preventing Card-Not-Present Fraud (December 2016)
33 slides from Visa's conference presentation, Dec 8, 2016
Slide 1: Webinar: Preventing Card-Not-Present Fraud
Webinar: Preventing Card-Not-Present Fraud Gord Jamieson, Risk Services Andrew McGloin, Risk Services David Richey, Risk & Auth Products 8 December 2016 Visa Public
Slide 2: Disclaimer
Disclaimer The information or recommendations contained herein are provided "AS IS" and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should cons
Slide 3: Forward-looking statements and disclaimer
Forward-looking statements and disclaimer This presentation may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms “objective,” “goal,” “strategy,” “opportunities,” “continue," “can,” "wi
Slide 4: Agenda
Agenda • E-Commerce Landscape and Fraud Trends • Visa’s CNP strategy • Effective Merchant Fraud Management Strategy • Common Flags for CNP Fraud • Visa Merchant Purchase Inquiry 4 Preventing Card-Not-Present Fraud Webinar Visa Public
Slide 5: E-Commerce Landscape and Fraud Trends
E-Commerce Landscape and Fraud Trends Visa Public
Slide 6: Why are we talking about CNP?
Why are we talking about CNP? $3.5T GLOBAL ECOMMERCE SALES WILL DOUBLE FROM 2015 TO 2019 $1.7T Source: eMarketer July 2015, includes online and mobile ecommerce Increasing share of total retail spending from 7.3% to 12.4% Challenge: we expect CNP fraud to continue to outpace sales in the channel as
Slide 7: CNP Landscape: Trends and Drivers
CNP Landscape: Trends and Drivers Trends New Players, Disproportionate Products & Rapid channel fraud relative to Services growth channel Double digit YoY growth CNP accounts for 52% of US rates for the last 5 years domestic total fraud but is (13% for YE Q2 2016) only 40% of total sales volume* Dri
Slide 8: Historic CNP Fraud Rates
Historic CNP Fraud Rates US CNP fraud is expected to change similar to experiences in other markets • When chip-on-chip rates hit a breaking point of approximately 50%, fraudsters shift away from EMV terminals to the CNP channel. • One year after 50% chip-on-chip, Canada and Australia saw CNP fraud
Slide 9: Visa's CNP Strategy
Visa’s CNP Strategy Visa Public
Slide 10: Visa's strategy to address CNP fraud: smarter security through risk based and dynamic authentication
Visa’s strategy to address CNP fraud : Smarter security through risk based and dynamic authentication 1. 2. 3. Devalue Payment Data Eliminate Reduce Fraud Make sensitive data useless Transaction Friction Enhance predictive analytics through stronger technology Improve the exchange and modeling of in
Slide 11: Objectives in Addressing Risk
Objectives in Addressing Risk An Interconnected Approach to Balancing Risk, Convenience, and Investment Devalue Reduce Cost of Eliminate Payment Data Fraud Transaction Friction Chip Cards Geo-Location Alerts VCAS Encryption Tokens Visa Visa Device Level Checkout Transaction Authentication Advisor (V
Slide 12: Effective Fraud Management Strategy
Effective Fraud Management Strategy Visa Public
Slide 13: Effective fraud management requires a layered security strategy
Effective fraud management requires a layered security strategy Visa Tools Risk Scoring Databases (VbV, CVV2, Systems / Negative Pattern Professional AVS) Neural & Detection Expertise Fraud Networks/ Positive Engines Detection VTA Lists Rules Utilize existing card Use artificial Leverage Use engines
Slide 14: Automated Screening: most adopted fraud tool
Automated Screening: most adopted fraud tool Source: CyberSource Online Fraud Management Benchmark Report, 2016 http://forms.cybersource.com/LP=1248 14 Preventing Card-Not-Present Fraud Webinar Visa Public
Slide 15: Card Not Present Fraud Tools
Card Not Present Fraud Tools Whether you conduct your business by mail order, phone or over the Internet, Visa offers layers of protection. • Merchants who support CNP transactions can reduce their exposure to fraudulent transactions through an effective combination of Visa tools and acceptance proc
Slide 16: Card Verification Value 2 (CVV2)
Card Verification Value 2 (CVV2) • The Card Verification Value 2 (CVV2)* is a three-digit security number printed on the back of Visa cards to help validate that a customer is in possession of the card at the time of an order. • These numbers are used to help merchants validate that the customer has
Slide 17: Address Verification Service (AVS)
Address Verification Service (AVS) • Use AVS to verify the cardholder billing address – Confirm the order information – Ask the customer for the billing address (street address and/or postal code) for the card being used • Evaluate the AVS response code and take appropriate action based on all trans
Slide 18: Improving CNP with enhanced data exchange
Improving CNP with enhanced data exchange Enhancing risk-based Improving the checkout Expanding data analytics experience exchange Additional data No step up In-app and non-payment points available authentication and more related uses integrated into the (i.e., account provisioning) purchase environ
Slide 19: 3D Secure improvements
3D Secure improvements 3DS 2.0 protocol enhances issuer risk-based authentication capabilities and improves the user experience across multiple form factors and use cases limited expanded limited expanded 19 Preventing Card-Not-Present Fraud Webinar Visa Public
Slide 20: The Benefits of Risk-based Authentication
The Benefits of Risk-based Authentication Source: Visa Europe Case Study on Risk-based Authentication, May 2016 20 Preventing Card-Not-Present Fraud Webinar Visa Public
Slide 21: Risk Scoring and Neural Networks
Risk Scoring and Neural Networks Helps minimize fraud losses, maximize revenue and minimize operational costs • Allows businesses to customize rules and models to your specific business, across all sales channels, including web, mobile, call center, and kiosks • Confidently quantify fraud strategies
Slide 22: Using a Positive Database
Using a Positive Database Build a comprehensive database of “positive-list” customers • Encourage use of customer registration programs • Promote rewards programs for customers that ‘sign in’ • Creates opportunity to increase customer satisfaction • Limit or reduce fraud screening for regular ‘posit
Slide 23: Using a Negative Database
Using a Negative Database Utilize a negative database to reduce the impact of fraudulent transactions • Maintain key attributes of previously identified fraudulent transactions • Include data from fraud and chargeback reports • Flag transactions for further review or ‘decline’ where appropriate • Co
Slide 24: Professional Expertise
Professional Expertise Establish a formal fraud control function Perform internal fraud screening Establish procedures for responding to suspicious transactions and dollar thresholds Track fraud control performance and adjust fraud tools Train your employees to have a thorough understandin
Slide 25: Common Red Flags for Card Not Present Fraud
Common Red Flags for Card Not Present Fraud Visa Public
Slide 26: Common 'Red Flags' for Card Not Present (CNP) Fraud
Common ‘Red Flags’ for Card Not Present (CNP) Fraud Product / Order Flags • Larger-than-normal orders • Multiple orders for the same product • Multiple cards used for a single purchase • Orders for products readily convertible to cash (gift cards) • Orders made up of “big-ticket” items Delivery Flag
Slide 27: What You Should Know About CNP Fraud
What You Should Know About CNP Fraud There is no “silver bullet” to effectively managing CNP fraud • Fraudsters take full advantage of the anonymity of the Internet • An authorization is not proof that the true cardholder is making the purchase. More is needed to detect fraud. • Effective fraud mana
Slide 28: Visa Merchant Purchase Inquiry (VMPI)
Visa Merchant Purchase Inquiry (VMPI) Solution Overview Visa Public
Slide 29: Background
Background Consumer complaints that lead to disputed transactions are reactive today, causing significant overhead and cost for all participants in the payment chain • Today, acquirers/merchants are *reacting* to financial claims filed by cardholders/issuers Current • 45 days to provide compelling e
Slide 30: Visa Merchant Purchase Inquiry – Digital Goods
Visa Merchant Purchase Inquiry – Digital Goods Merchants are able to satisfy the cardholder queries through providing information at the point of escalation to the Issuer 4 1 Real Time Inquiry 3 Call Centre Call Center Visa Merchant Transaction Inquiry 2 RESOLVE Purchase Inquiry ONLINE Real Time Res
Slide 31: Opportunity by Category
Opportunity by Category • There is significant opportunity due to the nature of disputes by their category, in order to avoid claims at the forefront of the dispute process, reducing costs and financial exposure for all transaction participants Fraud Authorization Processing Consumer Unrecognized Le
Slide 32: Upcoming Events and Resources
Upcoming Events and Resources Speaker contact information: Upcoming Webinars https://visa.com/cisp • Andrew McGloin - amcgloin@visa.com • Gord Jamieson – GJamieso@visa.com Visa Data Security • David Richey – drichey@visa.com • Michelle Levin – milevin@visa.com https://visa.com/cisp PCI Security Stan
Slide 33: Questions
Questions VISA
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