new method for increasing approvals with enhanced data sharing · may 22nd, 2019 l. new method for...
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May 22nd, 2019
New Method for Increasing Approvals with Enhanced Data Sharing
AUTHENTICATION WEBINAR SERIES
DATA ONLY FLOW
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Today’s Speakers
Director, Product Development, Mastercard
Bryan Kim Matthew Gulosh
Senior Program Manager, CardinalCommerce
Vice President, Product Management, Mastercard
Diego Szteinhendler
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q What is data only?
q What are the benefits of data only?
q Why is it important for merchants & issuers to participate?
q Why are vendors like CardinalCommerce supporting data only?
q What do you need to do to participate today?
Agenda
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Ecommerce Retail Sales Set to Double in the Next Five Years
Source: Business Insider Intelligence estimates, Ecommerce Foundation, eMarketer 2018 4
PAYMENT LANDSCAPE
136 142 146 170 199 230 260 299340
390453
515593
680
777
885
1,005
4% 4% 4% 4% 5%5% 6%
6%7%
8%9%
10%
12%
13%
15%
16%
18%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
200
400
600
800
1000
1200
1400
1600
20072008
20092010
20112012
20132014
20152016
20172018E
2019E2020E
2021E2022E
2023E
Billions ($) Percentage of total retail sales
US ECOMMERCE PAYMENTS VOLUME
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5
4
5.3
6.5 6.9 7.2
2016 2017 2018 2019 2020
ONLINE CARD FRAUD TO RISE TO USD 7.2BN BY 2020 2
98%
82%
Physical Approval rate1
Digital Approval rate1
Low Digital Approval Rates & High Online Card Fraud
DIGITAL APPROVALS
1. MASTERCARD. OCTOBER 2017 THROUGH SEPTEMBER 2018 DATA, ACROSS ALL CARD TYPES. 2018.2. LexisNexis. The 2017 True Cost of Fraud Report.
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False Declines for Payment Card Transactions
Totaled$331 billion in
20181
$331 Billion 32%
32% of Falsely DeclinedConsumers Stop
Shopping with that Retailer2
3x
False Positive Decline Rate is
Over 3 times the Rate of Existing
Card Fraud3
1.US Payment Forum, Card-Not-Present Fraud Analysis 2017 2.JAVELIN Study 2018 3.JAVELIN False Positive Study
False Declines LandscapeFALSE DECLINES
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Enhance Authorization Message with
Data Only
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What is Data Only?
DATA ONLY
Data Only is a transaction flow through which the merchant can share data with the issuer via EMV 3DS to influence approvals on Mastercard
branded transactions while guaranteeing a frictionless experience for the cardholder
Frictionless cardholder experience
Decrease online card fraud
Increase approvals
Reduce false declines
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10x more data
Merchant signals through 3DS service provider to initiate a Data Only
transaction with MSG Category=80
EMV 3DS authentication request
“Data Only” request
Merchant & Third-Party Providers
ID CHECK
Digital Transaction Insights Issuer
How does Data Only work?
DATA ONLY
Initiate all Data Only transactions with your EMV 3DS provider
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What are the benefits of Data Only?
DATA ONLY
Enhances authorization message improving decisioning, increasing approvals & reducing false declines
Reduces latency compared to a full 3DS authentication cycle
Guaranteed frictionless experience for cardholders
Leverages existing EMV 3DS implementation
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EMV 3-D Secure Full Authentication
Data Only
AlwaysFrictionlessExperience
Influence Issuer Approval Decision
No Transaction Latency
Liability Shift Real-time Mastercard Risk
Assessment
Potential for step-up
challenge
What is the difference between EMV 3DS & Data Only?
DATA ONLY
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What are the outputs of Data Only to the issuer?
DATA ONLY
Data is shared with the issuer through Digital Transaction Insights, three bytes of data placed in the authorization message from Mastercard’s Smart Authentication engine to improve the
issuer’s decisioning on that transaction
“Data Only” request Digital Transaction Insights Issuer Merchant
ID CHECK
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Code Mastercard Reason Code Description (byte 2)A Risk Event - Suspicious Account ActivityB Risk Event - Unknown Device/Account RelationshipC Risk Event - Device or Profile Information associated with fraud eventD Risk Event - Recent High Risk change to Device or Profile InformationE Risk Event – Recent change to Device or Profile InformationF Risk Event - PAN associated with fraud eventG New Account or Insufficient DataH Merchant/ Acquirer: Merchant (fraud) risk high (assessed by Mastercard)I Merchant/ Acquirer: Merchant (fraud) risk low (assessed by Mastercard)J Environment: Good/ Known IPK Cardholder: Billing address – prior history establishedL Cardholder: Email address – prior history establishedM Cardholder: Phone number – prior history establishedN Cardholder: Shipping address – prior history establishedO Cardholder: PAN behavior established high trust in the current transactionP Environment: Device knownQ Environment: Account established on DeviceR Environment: Session - Trusted/normal/ innocent sessionS More than one Cardholder category establishedT More than one Merchant/ Acquirer category establishedU More than one Environment category establishedV Co-occurring: established link between Cardholder and Merchant/ AcquirerW Co-occurring: established link between Cardholder and EnvironmentX Co-occurring: established link between Merchant/ Acquirer and EnvironmentY All three categories establishedZ Most Trusted (future use)
Reason Code from Mastercard (defined letters A to Z)
Risk Assessment from Mastercard(0-9)
Reason Code from Merchant
How can the issuer improve decisioning with this data?
DIGITAL TRANSACTION INSIGHTS
Digital Transaction Insights 3 bytes of data to issuer
HIGHER RISK
LOWER RISK
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How can you participate in Data Only?
DATA ONLY
• All merchants enabled for EMV 3DS can initiate Data Only transactions through their 3DS service provider
• Once configured for EMV 3DS, merchant must register with the Mastercard Identity Check program
Merchants
• All issuers in North America are enabled to receive Data Only insights known as Digital Transaction Insights in existing authorization message
• Mastercard has enabled +1,000 issuers globally to act on Digital Transaction Insights
Issuers
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AUTHENTICATION WEBINAR SERIES
Thank You! Please contact us for any additional information
Webinar recording & deck will be sent out to all participants
authentication@mastercard.com
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