Presentation on theme: "Increase conversion and reduce your online fraud WEDNESDAY, JUNE 25 TH 2014 GUISTHINIO RIRIHENA, TECHNICAL CONSULTANT."— Presentation transcript:
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 Fraud Prevention Expertise at Ingenico Payment Services Case Studies
4 7.000 webshops 100 new webshops every month E-commerce in Belgium is expanding
5 2011 2012 2013 1.65 Bn 2.06 Bn 2.53 Bn 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: 201120122013 YTD 18.23 Mn 22.91 Mn 27.65 Mn +24.86% +23.15%
7 1 2 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 Christmas Shopping 2012 Early bookings Bookings & Summer sales Back to school Christmas Shopping 2013 12/01/2014 Shopping periods
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 reports Research: Miriam Quick, Ella Hollowood, Christian Miles, Dan Hampson **Source: Verizon annual Data Breach Investigations Report More (sophisticated) fraud to come.
17 Total cost of fraud Direct Financial Costs Lost Revenues Prevention Costs
18 What is your total cost of fraud? Tolerant policyTight policy Low control, low awarenessHigh control but intensive in resources ? Missed revenuesDirect financial costsPrevention costs
4 Fraud 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 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, 3 rd 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 Velocity Checks, GeoIP localisation, 3 rd 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, 3 rd 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, 3 rd party access 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 Fraud Expert Checklist Fraud Expert Scoring 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 Managed Services Outsourced Manual Reviews Consultancy & Reports Managed Services Outsourced 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 Merchant controlled rules Ogone Fraud Expert score
24 Transaction real-time flow with fraud check. Order Merchant rules Expert score Global fraud score Manual review By You By Ogone Experts Accept Block or
25 Merchant rules – Checklist or Scoring Payment Cardholder: Nishanth Chandran Card type: MasterCard Card number: ************* Expiry date: 12/16 CVC: *** I confirm my payment 90+ criterias Max. card usage Min. amount Max. amount Card country IP address Airport destination 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
28 Ogone Fraud Expert - Features Industry templates Automatically implements and maintains sector-specific risk profiles Cross-merchant intelligence Aggregates the knowledge and experience gained from other merchants Cross-parameter checks Detects suspicious behaviour using more than 20,000 rules plus velocity checks maintained by our experts 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 Outsourced manual review Offers a manual review of suspicious transactions by our teams of experts – at peak times, during the holidays or 24/7 Real-time behavioral mapping Performs real-time correlation of transactions to closely track unusual behaviours IP Geolocation Differentiates 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 Poppins Email:firstname.lastname@example.org 123 Las vegas blvd Las Vegas, NV 702-534-7698 IP:206.45.95.01 Geoloc: Nevada cc: 4563296511117777 Name: Abraham Zakaria email: email@example.com 615 E. 35th St New york, ny 212-365-7878 IP:184.108.40.206 Geoloc: New york Cc: 5125189074381930 Name: Aaron Wall email: firstname.lastname@example.org 8 Hollyoke Ave Minneapolis, MN 320-698-8354 IP:220.127.116.11 Geoloc: Minnesota Cc: 4123234534568759 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.
Fraud Prevention Expertise 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 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 monitoring Rejection sources analysis Chargebacks analysis 3-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
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 conversion Narrowed 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
47 Air India Your Palace in the Sky Flag carrier of India Founded 15 October 1932 109 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 before Business 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 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 & A PAYMENT-SERVICES.INGENICO.COM WWW.OGONEFRAUDEXPERT.BE