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Increase conversion and reduce your online fraud

Increase conversion and reduce your online fraud. Wednesday, june 25 th 2014 Guisthinio ririhena , technical consultant. Agenda. Belgian e-Commerce landscape E-Commerce fraud trends The true cost of fraud Fraud Prevention Solutions at Ingenico Payment Services

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Increase conversion and reduce your online fraud

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  1. Increase conversion and reduce your online fraud Wednesday, june 25th 2014 Guisthinio ririhena, technical consultant

  2. Agenda • Belgiane-Commerce landscape • E-Commerce fraud trends • The truecost of fraud • FraudPreventionSolutions at Ingenico Payment Services • FraudPrevention Expertise at Ingenico Payment Services • Case Studies

  3. BE Ecom landscape 1

  4. E-commerce in Belgium is expanding 100 new webshops everymonth 7.000 webshops

  5. Belgiane-commerce in value Total turnover of all e-commerce transactions processed by Belgian webshops(with a Belgian entity) over the Ogone platform: 2.53 Bn 2.06 Bn 1.65 Bn +20.65% +25.68% 2012 2011 2013

  6. Belgiane-commerce in volume Total volume of all e-commerce transactions processed by Belgian webshops(with a Belgian entity) over the Ogone platform: 27.65 Mn 22.91 Mn 18.23 Mn +23.15% +24.86% 2011 2012 2013 YTD

  7. Top 3 E-commerce industries Top 3 remains Travel, Fashion and Ticketing 1 2 3

  8. Foreigncustomerson BE webshops 25% of the BE E-commerce volume comes from foreign customers 4% 10% 2%

  9. Shopping periods ChristmasShopping 2012 Earlybookings Bookings & Summer sales Back to school ChristmasShopping 2013 12/01/2014

  10. Paymentmethods

  11. E-Commerce fraud trends 2

  12. FraudPrevention • Tools & technologies • Flow and integrationwithpaymentflow & infra • Resources and organization

  13. Online « CNP » fraud in Europe +21,2 % CNP fraudincreased by 21,2 % (2014 ECB report). 60 % of Europeanfraud are CNP fraud.

  14. Online fraud – trends and prospective view • In 2013, no lessthan 1300+ large data breaches.** • Stolen data volume increasesheavily. In 2014, same volume than in 6 monthsthanduring full 2013. • Overview of largest data breachesduring last years* • More (sophisticated) fraud to come. *Source: DataBreaches.net, IdTheftCentre, press reportsResearch: Miriam Quick, Ella Hollowood, Christian Miles, Dan Hampson **Source: Verizonannual Data Breach Investigations Report

  15. eCommerceFraudexposure – per country

  16. The truecost of fraud 3

  17. Total cost of fraud Direct Financial Costs Lost Revenues Prevention Costs

  18. What is yourtotalcost of fraud? ? Tolerant policy Tightpolicy Low control, low awareness High controlbut intensive in resources Missedrevenues Direct financial costs Preventioncosts

  19. FraudPreventionSolutionsat Ingenico Payment Services 4

  20. FraudPrevention @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. FraudPrevention Portfolio Managed Services OutsourcedManualReviews Consultancy & Reports Managed Services OutsourcedManualReviews Consultancy & Reports • Fraud Expert • -Industry templates, • -20 000+ rules • -Device Fingerprinting, • -Behavioral mapping • -cross-merchant experience • -Flex3DS • Fraud Expert • -Industry templates, • -20 000+ rules • -Device Fingerprinting, • -Behavioral mapping • -cross-merchant experience • -Flex3DS Capabilities • Scoring • -Accept / Deny / Review decision on scoring of all criteria • -Aim: automatedecisioning by granular overal real-time trx assessment • -Tools: Up to 70 criteria (BL, GL, WL, AVS, VelocityChecks, GeoIPlocalisation, 3rd party access • Checklist • -Accept / Deny / Review decision on single criteria • -automated decision by real-time trx assessment • -Tools: Up to 70 criteria (BL, GL, WL, AVS VelocityChecks, GeoIPlocalisation, 3rd party access • FraudDetection Module • Accept / Deny decision • Tools: BL, risky countries, amount limit, 3-D Secure FraudPrevention Product Portfolio

  22. Ogone Fraud Expert • TougheronFraudsters, SimplerforYou • Expertise & Technologycombined • Full Flexibility, Full Control

  23. Ogone Fraud Expert Full Flexibility, Full Controlwith 2 layers of protection Merchant controlled rules Ogone Fraud Expert score

  24. Transactionreal-timeflowwithfraud check. Accept Merchantrules Global fraud score By Ogone Experts By You or Order Manualreview Expert score Block

  25. Merchant rules – Checklist orScoring … Max. card usage Anonymous proxy • 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 90+ criterias Min. amount Payment Cardholder: Nishanth Chandran Card type: MasterCard Card number: ************* Expiry date: 12/16 CVC: *** Max. amount Card country IP address I confirmmypayment Airport destination

  26. Fraud Expert Checklist

  27. Fraud ExpertScoring

  28. Ogone Fraud Expert - Features Cross-parameter checks Detects suspicious behaviour using more than 20,000 rules plus velocity checks maintained by our experts Industry templates Automatically implements and maintains sector-specific risk profiles Cross-merchant intelligence Aggregates the knowledge and experience gained from other merchants Merchant-controlled rules Gives you control and flexibility with more than 90 rules you can configure to suit your business Device fingerprinting Identifies the unique device used for a fraudulent transaction and improves tracking Real-time behavioral mapping Performs real-time correlation of transactions to closely track unusual behaviours Outsourced manual review Offers a manual review of suspicious transactions by our teams of experts – at peak times, during the holidays or 24/7 IP Geolocation Differentiates between threats and genuine transactions by pinpointing the buyer's location

  29. DeviceIdentification • 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. FraudPreventionwithDeviceIdentification abuse suspect X ? Name: Aaron Wall email: a243@yahoo.com 8 Hollyoke Ave Minneapolis, MN 320-698-8354 IP:72.138.11.9 Geoloc: Minnesota Cc: 4123234534568759 Name: Mary Poppins Email:pop25@gmail.com 123 Las vegas blvd Las Vegas, NV 702-534-7698 IP:206.45.95.01 Geoloc: Nevada cc: 4563296511117777 ? suspect Name: Abraham Zakaria email: az@chase.com 615 E. 35th St New york, ny 212-365-7878 IP:94.115.85.10 Geoloc: New york Cc: 5125189074381930

  31. Authenticationtool : 3-D Secure • For the following brands : VISA, MASTERCARD, AMERICAN EXPRESS, JCB & DINERS • Allowliability shift towardsissuer • Fraudremaincounted in the CTR ratio by the schemes.

  32. 3-D Secure : Diverse adoption per country 3-D Secure Deployment(transactions %) Authenticationsuccess(transactions %)

  33. A flexible approach to 3-D Secure ? Flex3DS Transaction flow of an orderwith Flex3DS

  34. Flex3DS – Benefits & feature • Benefits and objectives: • Increaseacceptance rate and conversion based on country specifics • Minimizeriskexposure • Flex3DS In practice: • Dynamicactivation of 3-D Secure: • Definewhen to (de)activate 3-D Secure basedon multiple parameters • Definewhen to (de)activate 3-D Secure basedonfraud risk check • Flex3DS : 2 (complementary) modes • Ogone back office functionnality: definewhen to deactivate 3-D Secure basedon : BIN, Subbrand, issuer, amount, Fraud risk Score (incl. 90+ criteria)  Simple to configure • Field value : activate 3-D Secure ornottellusforeachtransactionifyou 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 islower • I deactivate 3-D Secure for all amountsbelow €30 • Will encourage spontaneouspurchases • I deactivate 3-D Secure for all « non risky » orders (based on yourfrauddetection config.) • Will increase conversion for the majority of your transaction • Will minimize the risk and shift liability for the medium and highrisk transactions • Note: youcandefine a rule to substract point or overrideanyrule for a highrisk transaction thatgot a successful 3-D Secure authentication *these are notrecommendationbutjustexamples in order to giveyousome practical ideaonhow Flex3DS canbeused. Recommendationscanbegivenafterin-depthanalysis of your business throughanacceptance/rejectionrateanalysis.

  36. Third Party integration

  37. FraudPreventionExpertise at Ingenico Payment Services 4

  38. Ingenico’s expertise to support technologies • A team of experts to support your business. • « Passive » Support : • Technical consultants specialized in fraudprevention to answeryour questions. • « Continuous » Support : • ManualReview of medium riskorders. • Customer-Dedicatedfraudprevention consultant • « Periodic » or « Ad hoc » reports: • Acceptance and Rejection rate monitoring • Rejection sources analysis • Chargebacksanalysis • 3-D Secure Success/Failure/Abandon rate • Measurement of customer ‘total cost of fraud’ • Rules/Processadjustementsrecommendations (based on previousanalysis) • « Pro-active » Support : • R&D team monitoring global database and overall performance. • Specialized consultants informingmerchants of « burst out » attackswhiletheystart.

  39. Ogone Expert ManualReview • Benefits and objectives: • Increaseacceptance rate and conversion • Reducecosts • Manage growth and sales peaks • In practice: • Individual and manual order review: • Byfraudanalysis expert • For all transactionsidentified as medium risk byFraud Expert duringreal-timefraud check. • Flexibleactivationbasedonneeds: • 24/7 – nights and week end – seasonalpeaks • For somepaymentmethodsorsome accounts

  40. Case Studies 5

  41. Mobile top up provider • Propose recharge of 25 European mobile phone networks • 50 000+ transactions per month • Tripledigityearlygrowthsince 2010

  42. Keychallenges Larger volumes & better visibility led to more fraud threats International development. First stop: France & The Netherlands  More fraudattempts, lessconversion Narrowedmargins

  43. Situationbefore 30% of orders wereblocked Fraudrateabove1%

  44. Solutions Implementation of FraudExpert’stwolayers of protection Use of the latesttechnologiessuch as Device Fingerprinting Betterprofiling of Positive and Negativecustomers Loosenfraudrules and velocitychecks Outsource the reviewing of suspicioustransactions

  45. After 2 month +10.8% Increasedrevenues Fraudulenttransactions Blockedtransactions -35% -70%

  46. They trust us

  47. Air India • Your Palace in the Sky • Flag carrier of India • Founded 15 October 1932 • 109 Aircraft • 60 Domesticdestinations • 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 discontinuitythreatens… 90% of orders were manuallyreviewed Time taken forreview was 8 hours

  50. After 6 months • Charge back ratesfellfrom 0.34% to 0.01 % • Lead time formanualreviewreduced 8 hours Needto review data from different sources 2 hours Informationavailableon 1 single screen For international & domesticflights • Reduced time betweenbooking and flight… From 72 hours REVIEW REVIEW Till Last Minute 90% 3-5%

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