8 Actions to tackle Online fraud9 SEPTEMBER 2014,ELIE CASAMITJANA / PRODUCT MANAGER FRAUD

agenda

New opportunities, new threats

8 Actions to tackle online fraud

Q&A

1New opportunities, new threats

4

Online fraud trends in Europe

+21,2 %

· CNP fraud increased by 21,2 %

Year-on-Year*

· 60 % of European fraud are CNP

fraud.

· France & UK are top 2 countries

· More and more « sophisticated »

fraud patterns

· More and more « burst out » attacks

*source: ECB report February 2014

5

Understanding the true cost of fraud

direct financial lost+

lost revenues+

prevention costs

TOTAL COST OF FRAUD

8 Actions to tackle online fraud2

7

1 Data is key,use it effectively

Identify all data you get from your customers

Check for any additional data

Share all this data with your fraud prevention tool(s)

Help differentiate genuine transactions from suspicious /risky ones>

8

What type of data can be used for fraud detection ?

*all this data can be gathered by your Payment Service Provider in certain cases (ex: hosted page)

Other data

inputs

Personaldata

Service &sector

specificdata

Paymentdata

- Card data - Cardholder name - CVV - Transaction date & time - …

- Product type - Date of departure - Departure/ Destination location - Delivery method - …

- Contact data - Billing data - Shipping data - …

- Device Fingerprinting - IP address - Proxy piercing - NPA - …

9

2 Automate your decisions

Identify the percentage of order reviews you currently perform as opposed to automated decisions

Identify ways of differentiating between good and bad orders, looking for automated tools that enable you to do so without resort to manual review

Define and monitor automated decision thresholds. Bear in mind that the lower the average basket amount, the less profitable is the manual review

Optimise manual review rate and reduce prevention costs>

10

3 Monitor denied Transaction rates

Introduce a monthly report that identifies KPIs related to the percentage of denied transactions

Clarify thresholds at which a more in depth analysis is required

Identify root causes and define possible changes to be made

Implement proposed changes on a selected portion of your orders, monitor the results and validate the changes for all relevant orders

Boost sales and enhance customer satisfaction>

11

4Adopt an individual countryand specific payment methodapproach

Identify payment methods available in each country, consumer preferences, payment method risks and guarantees

Apply granular decision making by defining a payment method specific fraud detection configuration

Implement all your KPIs and monitoring tools, segmenting them according to the relevant payment method and country

Improve your fraud and revenues KPIs>

12

Payment method landscape in European countries

Define most relevant fraud prevention policy based on local specifics>

*source: Ingenico Payment Services transactions over the past 12 months

United Kingdom Italy Spain Belgium France Germany Netherlands0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Direct Debit

Open Invoice

Purchasing Card

WebBanking

Money wallet

Debit Card

Credit Card

13

5Using authentication tools dynamically

Introduce regular reports on basket abandonment rate for 3-D Secure and non-3-D Secure... Break the analysis down according to geography and basket size

Identify segments where using 3-D Secure harms conversion significantly

Implement a dynamic 3-D Secure strategy

Measure the impact on your sales and fraud KPIs and refine the configuration

Optimise your conversion and reduce your risk>

14

3-D Secure adoption & impact on conversion

Transactions with 3-D Secure protocols

Define a strategy based on your business specifics>

*source: Ingenico Payment Services transactions over the past 12 months

2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q30%

10%

20%

30%

40%

50%

60%

70%

80%

90%

United Kingdom

Italy

Spain

Belgium

France

Germany

Netherlands

15

3-D Secure adoption & impact on conversion

3-D Secure impact on conversion can depend on :

- Country- Amount- Channel (mobile, etc)- Issuer- Sub-brand- Industry/Products

Introducing a flexible approach to 3-D Secure based on:

• Above criteria• A combination of above criteria• The fraud risk score

Mitigate your risk and boost your conversion>

16

6Use negative and positive lists

Track your disputed transactions data – e-mail, telephone number, IP etc

Track VIP and loyal customers with any relevant unique identifier

Implement a process to add this data to negative and positive lists on a regular basis

Define rules so that the presence of this data in a list will positively or negatively affect the risk score

Prevent repeat fraud and improve customer satisfaction>

17

7Use the latest technologies

Identify the latest technologies to detect fraud with minimal impact on the customer experience

Calculate the cost of implementation to ensure a good return on investment

Once implemented track the results

Protect against sophisticatedattacks>

18

Fraud Expert / tougher on fraudster, simpler for you

Industry templates

Cross-merchantintelligence

Device fingerprinting

Flex3DS

Cross-parameter checks

Real-timebehaviouralmapping

IP Geolocation

19

8Ensure you get the right levels of expertise today,and tomorrow

Measure the annual overall cost of fraud to your company. Calculate the return on investment of employing full time experts or obtaining external support

Identify your in-house competences and weaknesses and, when relevant, find external support that will complement your team

Having defined your needs, search out the best consultancy and support packages that will support your business, today and into the future

20

Get the right expertise

A team of experts to support your business.*

• Example of key roles within a fraud team:

• Fraud Prevention strategist: Define fraud strategy & risk appetite of the company

• Fraud managers: Define & update rules

• Data miners/scientist/analysts: Monitor KPIs, KRIs, Manage smart data

• Fraud analysts/investigators: Review suspicious transactions and recommend action to be taken (deny/accept)

or ask your fraud prevention partner to support you with such needs.>

Q&A

More resources available on http://payment-services.ingenico.com/fraud