1. #PACnet15

2. Moderator  Marty Avalos » Paciolan Presenters  Scott Boding » CyberSource  Ian Poole » Cardinal Commerce

3. #PACnet15 » Marty Avalos Paciolan

4. All rights reserved CyberSource® 2015 #PACnet15 The New Landscape of Authentication Balancing the consumer experience with risk and costs - intelligently Scott Boding Ian Poole

5. All rights reserved CyberSource® 2015 #PACnet15 Confidentiality Notice By accepting this presentation and the information herein, you acknowledge that the information furnished to you is confidential, (the “Information”) and that your use of the information is limited to your business dealings with CyberSource Corporation, or its affiliated company, (“CyberSource”). You agree to keep the Information confidential and not to use the Information for any purpose other than in your business dealings with CyberSource. The Information may only be disseminated within your organization on a need-to-know basis to enable your participation in business dealings with CyberSource. Please be advised that the Information may constitute material nonpublic information under U.S. federal securities laws and that purchasing or selling securities of Visa Inc., the parent company of CyberSource, while being aware of material nonpublic information would constitute a violation of applicable U.S. federal securities laws. Disclaimer Studies, survey results, research, recommendations, and opportunity assessments are provided for informational purposes only and should not be relied upon for marketing, legal, regulatory or other advice. Recommendations and opportunities should be independently evaluated in light of your specific business needs and any applicable laws and regulations. CyberSource is not responsible for your use of any studies, survey results, research, recommendations, opportunity assessments, or other information, including errors of any kind, or any assumptions or conclusions you might draw from their use. Except where statistically significant differences are specifically noted, survey results should be considered directional only. Neither CyberSource, nor any of its employees, subsidiaries, parents, or affiliates make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information disclosed herein. Please note: This content may not be reproduced, distributed, or transmitted in any form or by any means, without prior written permission of CyberSource. Stuff Legal Makes Us Say

6. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Agenda How CyberSource Helps Paciolan Merchants Deeper into CyberSource Decision Manager New Rules Based Payer Authentication Paciolan and CyberSource Partnership Q & A

7. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 7 How Can CyberSource Help Paciolan Merchants?

8. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 TOKYO MIAMI SAN FRANCISCO CyberSource: Global Scale, Local Expertise $314B In Payments Managed in 2014 Over 400,000 Customers MEXICO CITY SÃO PAULO LONDON MOSCOW MUMBAI SYDNEY SHANGHAI SINGAPORE A Visa Inc. Company Since 2010

9. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Transfer Global and Country Cards Direct Debit and Bank Transfers Digital Payments ONE CONNECTION PROVIDES GLOBAL REACH Payment Management Platform “All brand names and logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with CyberSource.”

10. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Accurate Detection Reduce fraud rate Minimize chargebacks Positive Customer Experience Reduce false positives Increase acceptance rates Lower review rates Review orders faster Efficiency Maximize automated decisioning Streamline review process Maximize data and system integration Fraud Conversions A Holistic Approach to Fraud Management Operational Efficiency

11. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 3 Case Management System One console with all necessary data sources to make decision Manage review queue priorities and team assignments 4 Tuning and Analytics Real-time reporting suite: financial, operations, review team analysis Fine tune with passive testing without impacting operations 2 Rules Engine Flexible rule building Change rules instantly Use our risk score or customize your own Detection Radar Proven risk model Detection insights from over 60 billion Visa and CyberSource transactions Global multi-merchant data 260+ detection tests Device finger-print analysis 1 Web / Mobile / Call-Center CyberSource Decision Manager

12. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Massive Data Set For Better Accuracy 260 Real-Time Correlation Tests 60B Annual Visa & CyberSource Transactions Worldwide Compare with insights from over… Order Tests Accept Reject Review Increases Fraud Pattern Visibility 200X Transact ›› Global Decision Management System

13. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Fraud Management Transaction Flow Transaction History and Tests Business Rules Automated Mobile Call Center Kiosk POS Ticket Orders Web Fraud Accept Decision Reject Manual Review Tuning and Analytics 2.9% 0.90% (revenue) 0.90% (revenue) 25% 7.8% 0.47% (revenue) 0.47% (revenue) 1.9% Source: CyberSource Online Fraud Report, average figures across all respondents Source: Weighted Average of all Managed Risk Services Merchants

14. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Fraudster “pretends” to use another computer to escape detection Proxy piercing device fingerprinting X Excessive phone number, email, credit card repeats in a short time frame Fraudster tries to make as many purchases as possible before getting caught fraudster behavior example auto detectors (260+ for every transaction) BIN country does not equal bill country Fraudster steals credit card number but doesn’t have associated account information X 260+ Automated Detection Tests

15. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Triangulation Schemes What we shared last year at PACnet ‘14 Account TakeoverClean Fraud

16. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 This year: we’re highlighting a new product added to our fraud management product suite : Rules-Based Authentication

17. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 First Some Background: What is Payer Authentication? (aka 3-D Secure™) Payer Authentication is a means of “authenticating” a consumer with their card-issuing bank during a card-not-present transaction. – Authentication protocol developed by Visa in 1999; branded as: 3-D Secure™ – Programs based on the adopted protocol offered by most major payment brands: – Mandated in many countries and regions – International Standard – May qualify for fraud chargeback liability shift to Issuer - [Sounds Good, Right?] “All brand names and logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with CyberSource.”

18. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Challenges of Traditional 3-D Secure™ Traditional 3-D Secure challenges all orders Interrupts consumer checkout process Poor User Experience Higher Abandonment Can be more costly to merchants than fraud itself Source: Cardinal Commerce Friction!

19. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 New and Improved! – Rules Based Payer Authentication TraditionalRules Based Transaction Type Consumer Profile Consumer Routing Real-Time Rules Filters Invisible Auths Provides merchants with relevant data to make intelligent authentication routing decisions for deliver the most streamlined user experience for the order scenario. Configuration Options Comparison

20. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Consumer Experience by Authentication Method Not Participating in 3-D Secure Consumer experience impact: None, no action required Issuer is not participating Risk Based 3-D Secure (No Challenge) Consumer experience impact: Low to none Issuer uses a risk-based approach to determine risk Majority determined as low risk and are not challenged Risk Based 3-D Secure (Selectively Challenged) Consumer experience impact: Low Issuer uses a risk-based approach to determine risk Only high risk transactions are challenged using the issuer authentication method Traditional 3-D Secure (Enrolled Only) Consumer experience impact: Medium to high Account is enrolled in the issuer’s 3-D Secure program Consumer is challenged for every transaction Traditional 3-D Secure (Activation – During Shopping) Consumer experience impact: High Customer transferred to the issuer for enrollment into the optional program If customer does not enroll, 3-D Secure benefits may still be honored Consumer Checkout Friction 3-D Secure programs may offer liability protection, but at what cost to the user experience?

21. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 US Issuers Approach to 3-D Secure Source: Cardinal Commerce 2014

22. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Set Rules to Define When to Route for Authentication works with Verified by Visa, MasterCard SecureCode and other 3-D Secure programs Example: present transaction for authentication if issuing bank uses risk-based authentication and does not challenge customers Create Authentication Rule Centinel Platform accessed through CyberSource Platform

23. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Rules Based Payer Authentication Merchant Benefits Complements Decision Manager Merchant Control Less Manual Review Global Coverage Safely Accept Orders Liability Shift from Merchant to Issuer …accessed from Paciolan via the CyberSource API

24. All rights reserved CyberSource® 2015 #PACnet15 All rights reserved CyberSource® 2015 #PACnet15 Paciolan and CyberSource A Powerful Partnership 24 Paciolan and CyberSource have partnered to offer the CyberSource Payment Management solutions to Paciolan customers worldwide. Risk Intelligence Unrivalled access to the combined power of Paciolan and CyberSource data giving a unique advantage in managing fraud. Simplicity Provides a one-stop-shop for a cross-channel, independent, global integrated ticketing and fraud management solution. Time to market Pre-developed integration increases speed to market and reduces system development and maintenance costs. Optimization Increased automation streamlines the complete sales, payment and fraud management process.

25. All rights reserved CyberSource® 2015 #PACnet15 Visit CyberSource at Booth #207 www.cybersource.com Learn More…

26. #PACnet15 Please complete either the session evaluation form on your chair or online at http://pacnet.paciolan.com/schedule. Questions