Each month, we’ll help you navigate the emerging trends and forecasts for card-not-present (CNP) merchants with (what we think) are the best pieces of advice from Verifi and across the web. We promise to keep this newsletter short and sweet so let’s get started!
Q> EMV, NFC and other emerging technologies are creating new and sometimes unforeseen obstacles for merchants processing CNP payments. How can I choose a gateway partner and implement multi-layered authentication to help protect payments before and after EMV and as NFC and other technologies – and fraudsters – evolve?
This month’s newsletter looks at the current state of the industry particularly as it relates to EMV, provides tips on preparing for the liability shift in October, explains the importance of multi-layered authentication and identifies key capabilities to look for in a gateway partner to ensure your business can rise to today’s processing challenges – and tomorrow’s.
EMV NOT A BE-ALL AND END-ALL SOLUTION
The EMV fraud liability shift will happen on October 1 of this year, though many merchants are finding themselves unprepared. In fact, Forrester Research is forecasting that widespread adoption of the technology won’t occur until 2020. The technology will virtually eliminate skimming fraud, but experts warn that merchants should not consider chip & PIN the be-all and end-all when it comes to deterring other fraud threats like data breaches. Fraudsters will still be able to copy data and create counterfeit mag-stripe cards that will be accepted at any mag-stripe terminal or use counterfeit or stolen card information in CNP transactions.
As EMV pushes fraud online, tokenization, encryption and multi-layered authentication will be key. When the entire payment ecosystem implements tokenization, the payment infrastructure as a whole becomes more secure. EMVCo published version 1.0 of its tokenization specification in March of last year and various token services have been created based on this standard. Tokenized payment data has the potential to reduce data protection requirements for merchants because it strongly inhibits fraudsters from accessing sensitive data.
CHOOSING A GATEWAY PARTNER
Mobile commerce topped out at almost $204 billion in global revenue in 2014, and that number is expected to rise to $626 billion by 2018. The convenience of mobile wallets has streamlined payments both in-store and online as consumers are no longer forced to enter a 16-digit account number for every purchase. As technologies like Apple Pay make it simple for consumers to shop and swipe, merchants that are compatible with this technology stand to build increased loyalty with their customer base. To do that, merchants need an agile gateway that can optimize omni-channel, facilitate multi-layered authentication, provide in-depth analytics and adapt to tomorrow’s challenges. There are lots of “shiny new objects” available to merchants that promise to improve customer acquisition and boost profits, but without a reliable gateway, merchants face an endless cycle of costly updates and integrations.
This increased mobile adoption will also highlight the need for in-depth analytics and reporting capabilities.Deep insights into consumer behavior enables CNP merchants to optimize ad targeting, emails and personalize offers – all of which contribute to consumer loyalty. The increased security afforded consumers by mobile wallets is contributing to adoption, which is a boon for merchants who can collect advanced data sets and better segment their customer base to provide a one-to-one experience.
SMART DEVICES AND MULTI-LAYERED AUTHENTICATION
Almost all single-layer authentication methods are imperfect. Criminals have proven their ability to beat authentication methods like one-time passwords or question series. As EMV approaches and CNP fraud booms, fraudsters are becoming more advanced in their techniques to steal data, making it difficult for merchants to keep up. By implementing the proper combination of fraud protection tools and multi-layered authentication systems, merchants can maintain a secure payment processing operation without going overboard and inhibiting legitimate sales.
Striking the right balance can be difficult, but the adoption of smartphones and mobile wallets that can carry secure credentials has changed that. Merchants today can use converged solutions that utilize device features to authenticate transactions, including device fingerprinting, biometrics, geolocation and tokenization. There are risks and challenges involved in authenticating customers on mobile devices too, including the possibility of stolen or borrowed devices or infected devices. Merchants must employ a balanced approach to authenticating users on mobile devices, no trivial task given the increased popularity of the mobile channel.
EMV, NFC, mobile and multi-layered security are each unique topics that are intersecting in payments today. Multi-layered security supported by a solid payment gateway will allow merchants to adapt to the EMV standard while continuing to streamline payments and glean increased sales from omni-channel efforts. Mobile technology is evolving and new technologies will continue to emerge, making it more important than ever for merchants to choose a practical and agile gateway partner as fraudsters become more dynamic.
CNP merchants need a flexible gateway partner to streamline payments and adapt to the changing landscape. The shift to EMV and the need for optimized loyalty programs call for multi-layered fraud prevention tools that can be tested, toggled and supported by reporting that provides deep insights into different market segments. Verifi’s Global Payment Gateway, Decline Salvage, Cardholder Dispute Resolution Network™ (CDRN), Intelligence Suite® and Chargeback Representment (CBR) solutions seamlessly combine (without IT hassles) to form a processor agnostic “Super Gateway” that protects your payments from start to finish while ensuring legitimate sales flow through.
What are your thoughts? Ping us on twitter (@verifi) with #paymentstips and let us know what you think.