Which technology has the biggest potential, why biometrical identity will be on the rise and the importance of securing the payments chain were some of the talking points our CEO Martin Sweeney discussed at the Merchant Payments Ecosystem today in Berlin.
The underlying subject of the talk was understanding the new requirements under PSD2, and why responsibility in fraud prevention for merchants and PSPs is changing. And so is the entire payments ecosystem. “The only way to maintain your performance as a PSP is to use systems that automatically adapt to the changing landscape,” said Sweeney during his talk.
“PSPs are looking for the tools to achieve the lowest fraud detection rates seen in modern e-commerce.”
Securing the payments chain
Sweeney discussed how the payments ecosystem is changing under PSD2, and the implications for fraud and merchants. Purchases over 30 Euros now potentially have to go through 2-Factor Authentication (2FA) or 3DS (read about all the terms associated with PSD2 here).
This means that between the responsibility for 3DS and 2FA is taken away from the merchant and pushed up the value chain. There is still discussion over where this responsibility will land between the issuer and the acquirer/PSP but in either case there is a compulsion to get fraud under control.
Fraud rates under PSD2 are tough and ambitious for several merchants: in order to prevent 3DS or enabling a second form of authentication, merchants need to have chargeback rates of 0.13 or 13 basis points - and many don’t. Under new regulation, regulators are looking for the payments ecosystem to achieve some of the lowest fraud detection rates seen in e-commerce - a tough ask.
Risk and identity panel discussion
After the presentation, Sweeney took part in a panel discussion with Jeremy King from PCI Security Standards, Dirk Mayer from Risk Ident, Christian Chmiel from Web Shield and James O'Tool from ID-Pal.
The panel discussion was based around the implications of fraud in the ecosystem, whether new service providers are using new technologies to streamline verification and the future frontiers in digital security.
Panelists discussed the importance of collaboration and why merchants need to consider growing their business and scaling efficiently if they are successful at fraud detection.
“Competition for fraud is on both sides of the table, and it’s here to stay,” commented Sweeney.
The panel also agreed that biometrics will play a bigger role in the way of authentication.
To conclude, panelists were asked 3 things the audience should study after leaving the conference room: Dirk Mayer from Risk Ident answered to better understand whether you have a definition of fraud, how much fraud does your business have, and do companies talk regularly of new things in the fraud environment from colleagues in different industries?
Sweeney responded: "To understand what Artificial Intelligence actually is before putting it in marketing brochures, what PSD2 means and how it affects your business and responsibilities, and generally, what’s decreasing your conversion? Usually it’s 3DS."