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The New Landscape of Authentication

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Moderator Marty Avalos » Paciolan

Presenters

Scott Boding » CyberSource Ian Poole » Cardinal Commerce

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Marty AvalosPaciolan

All rights reserved CyberSource® 2015#PACnet15

The New Landscape of AuthenticationBalancing the consumer experience with risk and costs - intelligently

Scott Boding

Ian Poole


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 applicableU.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

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


How Can CyberSource Help Paciolan Merchants?


TOKYO

MIAMI

SAN FRANCISCO

CyberSource: Global Scale, Local Expertise

$314BIn

PaymentsManaged

in2014 Over

400,000Customers

MEXICO CITY

SÃO PAULO

LONDONMOSCOW

MUMBAI

SYDNEY

SHANGHAI

SINGAPORE

A Visa Inc. Company Since 2010


Transfer

190Countries

45+Funding

Currencies

Global andCountry Cards

Direct Debit and Bank TransfersDigital Payments

ONE CONNECTIONPROVIDES 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.”


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


3

Case Management System

• One console with all necessary data sources to make decision

• Manage review queue priorities and team assignments

4

Tuningand Analytics

• Real-time reporting suite: financial, operations, review team analysis

• Fine tune with passive testing without impacting operations

2

RulesEngine

• Flexible rule building

• Change rules instantly

• Use our risk score or customize your own

DetectionRadar

• 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


Massive Data Set For Better Accuracy

260 Real-Time

Correlation Tests

60BAnnual

Visa & CyberSourceTransactionsWorldwide

Compare with insights from over…

Order

BusinessRules

Tests

Accept Reject Review

Increases Fraud Pattern Visibility

200XTransact ››

Global Decision Management System


Fraud Management Transaction Flow

Transaction History and

Tests

Business Rules

Automated

Mobile

CallCente

r

Kiosk

POS

Ticket Order

s

Web

FraudAccept

Decision

Reject

Manual Review

Tuning and Analytics

2.9%

0.90%(revenue)25%7.8%

0.47%(revenue)

1.9%

Source: CyberSource Online Fraud Report, average figures across all respondents

Source: Weighted Average of all Managed Risk Services Merchants


Fraudster “pretends” touse another computerto escape detection

Proxy piercingdevice 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 behaviorexample auto

detectors (260+ for every transaction)

BIN country does not equal bill country

Fraudster steals credit card number but doesn’t have associated account informationX

260+ Automated Detection Tests


Triangulation Schemes

What we shared last year at PACnet ‘14

Account Takeover

Clean Fraud


This year: we’re highlighting a new product added to our fraud management product suite :

Rules-Based Authentication


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.”


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!


New and Improved! – Rules Based Payer Authentication

Traditional Rules 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


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

Consu

mer

Check

out

Fric

tion

3-D Secure programs may offer liability protection, but at what cost to the user experience?


US Issuers Approach to 3-D Secure

Source: Cardinal Commerce 2014


Set Rules to Define When to Route for Authenticationworks 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


Rules Based Payer Authentication Merchant Benefits

Complements Decision Manager

MerchantControl

LessManual Review

Global Coverage

SafelyAccept Orders

Liability Shiftfrom Merchant

to Issuer

…accessed from Paciolan via the CyberSource API


Paciolan and CyberSourceA Powerful Partnership

24

Paciolan and CyberSource have partnered to offer the CyberSource Payment Management solutions to Paciolan customers worldwide.

Risk IntelligenceUnrivalled access to the combined power of Paciolan and CyberSource data giving a unique advantage in managing fraud.

SimplicityProvides a one-stop-shop for a cross-channel, independent, global integrated ticketing and fraud management solution.

Time to marketPre-developed integration increases speed to market and reduces system development and maintenance costs.

OptimizationIncreased automation streamlines the complete sales, payment and fraud management process.


Visit CyberSource at Booth #207

www.cybersource.com

Learn More…

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

Thank you!Questions

#pacnet15. moderator marty avalos » paciolan presenters scott boding » cybersource ian poole »...

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