increase conversion and reduce your online fraud wednesday, june 25 th 2014 guisthinio ririhena,...
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Increase conversion and reduce your online fraudWEDNESDAY, JUNE 25TH 2014GUISTHINIO RIRIHENA, TECHNICAL CONSULTANT
Agenda
Belgian e-Commerce landscape
E-Commerce fraud trends
The true cost of fraud
Fraud Prevention Solutions at Ingenico Payment Services
Fraud Prevention Expertise at Ingenico Payment Services
Case Studies
1 BE Ecom landscape
4
7.000
webshops
100 new
webshops every month
E-commerce in Belgium is expanding
5
2011 2012 2013
1.65Bn
2.06Bn
2.53Bn
Belgian e-commerce in value
Total turnover of all e-commerce transactions processed by Belgian
webshops (with a Belgian entity) over the Ogone platform:
+25.68% +20.65%
6
Belgian e-commerce in volume
Total volume of all e-commerce transactions processed by Belgian
webshops (with a Belgian entity) over the Ogone platform:
2011 2012 2013 YTD
18.23Mn
22.91Mn
27.65Mn
+24.86%+23.15%
7
12 3
Top 3 E-commerce industries
Top 3 remains Travel, Fashion and Ticketing
8
4%
10%
Foreign customers on BE webshops
25%
of the BE E-commerce volume
comes from foreign customers
2%
9
01/09/2012 17/10/2012 02/12/2012 17/01/2013 04/03/2013 19/04/2013 04/06/2013 20/07/2013 04/09/2013 20/10/2013 05/12/201340000
50000
60000
70000
80000
90000Christmas Shopping
2012
Early bookings
Bookings & Summer
sales
Back to school
Christmas Shopping
2013
12/01/2014
Shopping periods
10
Payment methods
2010
2011
2012
2013
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
48.7%
38.5%
34.0%
31.5%
24.3%
27.1%
25.6%
26.0%
11.6%
15.1%
21.2%
23.7%
10.7%
10.8%
10.0%
9.3%
VISA
Mastercard
Bancontact
Bank-Branded Pay Buttons
American Express
Maestro
PayPal
Other
Diners
Bank transfer
Diners Club
2 E-Commerce fraud trends
Fraud Prevention
Tools & technologies
Flow and integration with payment flow & infra
Resources and organization
13
Online « CNP » fraud in Europe
+21,2 %· CNP fraud increased by 21,2 % (2014 ECB report).
· 60 % of European fraud are CNP fraud.
14
Online fraud – trends and prospective view
· In 2013, no less than 1300+ large data breaches.**
· Stolen data volume increases heavily. In 2014, same volume than in 6 months than during full 2013.
Overview of largest data breaches during last years*
*Source: DataBreaches.net, IdTheftCentre, press reportsResearch: Miriam Quick, Ella Hollowood, Christian Miles, Dan Hampson
**Source: Verizon annual Data Breach Investigations Report
More (sophisticated) fraud to come.
15
eCommerce Fraud exposure – per country
15
0.000% 0.200% 0.400% 0.600% 0.800% 1.000% 1.200%0%
5%
10%
15%
20%
25%
30%
35%
40%
Belgium
Netherlands
France
UK
Germany
Spain
Austria
Italy
Switzerland
Denmark
Finland
Norway
Sweden
Fraud rate
Mar
ket g
row
th
Bubble = market size
The true cost of fraud3
17
Total cost of fraud
Direct Financial
Costs
Lost Revenues
Prevention Costs
18
What is your total cost of fraud?
Tolerant policy Tight policy
Low control, low awareness High control but intensive in resources
?
Missed revenuesDirect financial costs
Prevention costs
4Fraud Prevention Solutions at Ingenico Payment Services
20
Fraud Prevention @Ingenico Payment Services
8.000+ merchants· 3 suisses· Petit bateau· Sandro· Zadig&Voltaire· Decathlon· Royal Air Maroc· Mobistar· Jet Air
· EgyptAir· Cotswold· TUI France (Marmara)· Brussels Airlines· Coolblue· Conrad· Paylogic· BonPrix
· Secret sales· Orchestra· Thomas Cook· Christian Louboutin· Bose · LVMH· The Phone House· Bespoke
21
Fraud Prevention Portfolio
Fraud Detection Module
Accept / Deny decision
Tools: BL, risky countries, amount limit, 3-D Secure
Checklist-Accept / Deny / Review decision on single
criteria
-automated decision by real-time trx assessment
-Tools: Up to 70 criteria (BL, GL, WL, AVS Velocity Checks, GeoIP localisation, 3rd
party access
Scoring
-Accept / Deny / Review decision on scoring of all criteria
-Aim: automate decisioning by granular overal real-time trx assessment
-Tools: Up to 70 criteria (BL, GL, WL, AVS, Velocity Checks, GeoIP localisation, 3rd
party access
Fraud Expert-Industry templates,
-20 000+ rules
-Device Fingerprinting,
-Behavioral mapping
-cross-merchant experience-Flex3DS
Capabili
ties
Fraud Expert Checklist
Fraud Expert Scoring
Fraud Expert-Industry templates,
-20 000+ rules
-Device Fingerprinting,
-Behavioral mapping
-cross-merchant experience-Flex3DS
Managed ServicesOutsourced Manual Reviews
Consultancy & Reports
Managed ServicesOutsourced Manual Reviews
Consultancy & Reports
Fraud Prevention Product Portfolio
Ogone Fraud Expert
Tougher on Fraudsters, Simpler for You
Expertise & Technology combined
Full Flexibility, Full Control
23
Ogone Fraud Expert Full Flexibility, Full Control with 2 layers of protection
Merchantcontrolled
rules
OgoneFraud Expert
score
24
Transaction real-time flow with fraud check.
Order
Merchantrules
Expertscore
Globalfraudscore Manual review
ByYou
ByOgoneExperts
Accept
Block
or
25
Merchant rules – Checklist or Scoring
Payment
Cardholder: Nishanth ChandranCard type: MasterCardCard number: *************Expiry date: 12/16 CVC: ***
I confirm my payment
90+criterias
Max. cardusage
Min.amount
Max.amount
Card country
IP address
Airportdestination
Anonymousproxy
…
• Checklist: • Block, accept or review transactions• 90+ criteria• Automate decisions, one parameter
at a time
• Scoring: • Give a weighting to any or all of the
90+ criteria• Define the thresholds at which the
system will block, accept or put transaction on hold for review
26
Fraud Expert Checklist
27
Fraud Expert Scoring
28
Ogone Fraud Expert - Features
Industry templatesAutomatically implements and maintains
sector-specific risk profiles
Cross-merchant intelligenceAggregates the knowledge and experience
gained from other merchants
Cross-parameter checksDetects suspicious behaviour using more than 20,000 rules plus velocity checks maintained by our experts
Merchant-controlled rulesGives you control and flexibility with more than 90 rules you can configure to suit your business
Device fingerprintingIdentifies the unique device used for a
fraudulent transaction and improves tracking
Outsourced manual reviewOffers a manual review of suspicious
transactions by our teams of experts – at peak times, during the holidays or 24/7
Real-time behavioral mappingPerforms real-time correlation of transactions to closely track unusual behaviours
IP GeolocationDifferentiates between threats and genuine transactions by pinpointing the buyer's location
29
Device Identification
It identifies computers & devices used for a transaction beyond IP address, cookies etc.
700 Million + device profiled & growing
Works in all Operating System & Browsers
No change in customer interaction
No additional load time
No imposition to customer for software
30
Fraud Prevention with Device Identification
abuse
X Name: Mary PoppinsEmail:pop25@gmail.com123 Las vegas blvdLas Vegas, NV702-534-7698IP:206.45.95.01Geoloc: Nevadacc: 4563296511117777
Name: Abraham Zakariaemail: az@chase.com615 E. 35th StNew york, ny212-365-7878IP:94.115.85.10Geoloc: New yorkCc: 5125189074381930
Name: Aaron Wall email: a243@yahoo.com8 Hollyoke AveMinneapolis, MN 320-698-8354IP:72.138.11.9Geoloc: MinnesotaCc: 4123234534568759
suspect
suspect
??
31
Authentication tool : 3-D Secure
• For the following brands : VISA, MASTERCARD, AMERICAN EXPRESS, JCB & DINERS
• Allow liability shift towards issuer
• Fraud remain counted in the CTR ratio by the schemes.
32
3-D Secure : Diverse adoption per country
3-D Secure Deployment (transactions %) Authentication success (transactions %)
33
A flexible approach to 3-D Secure ? Flex3DS
Transaction flow of an order with Flex3DS
34
Flex3DS – Benefits & feature
Benefits and objectives: Increase acceptance rate and conversion based on country specifics
Minimize risk exposure
Flex3DS In practice: Dynamic activation of 3-D Secure:
• Define when to (de)activate 3-D Secure based on multiple parameters
• Define when to (de)activate 3-D Secure based on fraud risk check
Flex3DS : 2 (complementary) modes
• Ogone back office functionnality: define when to deactivate 3-D Secure based
on : BIN, Subbrand, issuer, amount, Fraud risk Score (incl. 90+ criteria) Simple
to configure
• Field value : activate 3-D Secure or not tell us for each transaction if you want
to Full flexibility
35
Flex3DS – some practical examples
Examples of configurations*:
I deactivate 3-D Secure if country is France or Germany
Can increase conversion for these countries where adoption is lower
I deactivate 3-D Secure for all amounts below €30
Will encourage spontaneous purchases
I deactivate 3-D Secure for all « non risky » orders (based on your fraud detection config.)
Will increase conversion for the majority of your transaction
Will minimize the risk and shift liability for the medium and high risk transactions
Note: you can define a rule to substract point or override any rule for a high risk
transaction that got a successful 3-D Secure authentication
*these are not recommendation but just examples in order to give you some practical idea on how Flex3DS can be used. Recommendations can be given after in-depth analysis of your business through an acceptance/rejection rate analysis.
36
Third Party integration
Fraud Prevention Expertise at Ingenico Payment Services4
38
Ingenico’s expertise to support technologies
A team of experts to support your business.
« Passive » Support :· Technical consultants specialized in fraud prevention to answer your
questions.
« Continuous » Support :· Manual Review of medium risk orders.· Customer-Dedicated fraud prevention consultant· « Periodic » or « Ad hoc » reports:Acceptance and Rejection rate monitoringRejection sources analysisChargebacks analysis3-D Secure Success/Failure/Abandon rate Measurement of customer ‘total cost of fraud’Rules/Process adjustements recommendations (based on previous analysis)
« Pro-active » Support :· R&D team monitoring global database and overall performance.· Specialized consultants informing merchants of « burst out » attacks while
they start.
39
Ogone Expert Manual Review
Benefits and objectives: Increase acceptance rate and conversion
Reduce costs
Manage growth and sales peaks
In practice: Individual and manual order review:
• By fraud analysis expert
• For all transactions identified as medium risk by Fraud Expert during real-time fraud
check.
Flexible activation based on needs:
• 24/7 – nights and week end – seasonal peaks
• For some payment methods or some accounts
5 Case Studies
41
• Mobile top up provider
• Propose recharge of 25 European mobile phone networks
• 50 000+ transactions per month
• Triple digit yearly growth since 2010
42
Larger volumes & better visibility led to more fraud
threats
International development. First stop: France & The
Netherlands
More fraud attempts, less conversionNarrowed margins
Key challenges
43
Situation before
30% of orders were blocked
Fraud rate above 1%
44
Implementation of Fraud Expert’s two layers of
protection
Use of the latest technologies such as Device
Fingerprinting
Better profiling of Positive and Negative customers
Loosen fraud rules and velocity checks
Outsource the reviewing of suspicious transactions
Solutions
45
After 2 month
+10.8%
-70%-35%
Increased revenues
Fraudulent transactions
Blocked transactions
46
They trust us
47
Air India Your Palace in the Sky
Flag carrier of IndiaFounded 15 October 1932109 Aircraft 60 Domestic destinations 31 International destinations 19 Countries
48
Key Challenges
Two brands Merger – Air India and Indian Airlines
Bottleneck in Scalability of Manual Review
Team Awareness
Cleaner fraud with IP, Card country and others matching
Travel agent VS Fraudster
49
Situation beforeBusiness discontinuity threatens…
90% of orders were
manually reviewed
Time taken for review was 8 hours
50
After 6 months
2 hours
Information available on
1 single screen
8 hours
Need to review data from
different sources
Lead time for manual review reduced
Reduced time between booking and flight…
Till Last Minute
For international & domestic flights
From 72 hours
Charge back rates fell from 0.34% to 0.01 %
REVIEW REVIEW
3-5%90%
51
Conclusion
Fraud losses were drastically reduced
Increase in ecommerce sales
Order acceptance up to 35%
Reduced Cost and time taken for manual review
Profiled Positive and Negative Customers
New routes were adopted easily
Q & APAYMENT-SERVICES.INGENICO.COMWWW.OGONEFRAUDEXPERT.BE
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