Interview with Vincent Bibonne
Vincent Bibonne is Product Manager for our e-Commerce anti-fraud solutions within our Global Business Line Merchant Services. He joined us in February 2014.
Online purchases have really taken off in the last few years, how has fraud itself evolved?
Following the 2006 launch of the EMV (Europay MasterCard Visa) international security standard, PIN code authentication became a requirement for purchases paid by cards in physical stores. This strong authentication drastically decreased fraud rates in this sales channel. Consequently, fraud moved from physical stores to e-Commerce.
Additionally, e-Commerce picked up speed starting in 2010 and fraud, which was more opportunistic at that time, has become automated with the arrival of new technologies. This participated in the intensification of online fraud.
In the context of this intensification of online fraud, what are the direct and indirect impacts that merchants have to face?
One of the most direct impacts is product loss as well as revenue loss because of delinquencies. In addition to these direct impacts, e-merchants can be fined by their acquiring banks if their fraud rate is above a given limit. In this case, the acquiring banks may choose to stop bearing the costs related to delinquencies.
Lastly, fraud can have an indirect impact on the activities of e-merchants when it affects their brand image and their reputation. Indeed, consumers need to trust the security of an e-Commerce website in order to purchase on it and to entrust it with personal and banking data. Brand reputation recovery could generate significant marketing, communication and innovation costs in order to regain customers’ trust.
How can merchants protect themselves while minimizing friction points in the purchasing path?
As part of the fight against fraud, e-merchants have to strike the right balance between security and user experience. E-merchants can reach this balance by using the different methods used to analyze in details the risks associated to transactions.
3D-Secure is one of these solutions. This solution enables the strong authentication of a consumer through a one-time password (OTP) at the moment an online purchase is being validated. 3D-Secure’s main advantage for e-merchants is that it guarantees payments. For all its qualities in terms of security and authentication, this solution still adds an additional step in the customer path, which can affect conversion rates. In order to enhance the purchasing experience and to make it as fluid as possible, Worldline is offering the Smart 3D-Secure solution which enables the activation, or not, of the 3D-Secure authentication based on the risk assessed for each transaction.
E-merchants can also use artificial intelligence which will allow them to define risk scenarios based on their records and their experience in terms of transactions and delinquencies. This way, the anti-fraud engine can learn continuously and autonomously, and therefore adapt to new threats.
How does Worldline help e-merchants in the face of online fraud?
In addition to 3D-Secure, we offer a solution, called WL Fraud Risk Management for e-merchants, which caters perfectly to all e-merchants, regardless of their volume of transactions and their line of business. For small e-merchants, our solution is used in binary mode, which means it will either give a “Go” or a “No Go” based on a certain number of predefined criteria. In this context, a transaction is validated as soon as a “Go” is granted for any of these criteria. Mid-size e-merchants use the same solution but with an advanced set of rules, chosen by e-merchants among a list of 70+ rules. Lastly, we also offer this solution in “scoring” mode that will establish a risk score for each transaction. There are three “scoring” levels with acceptation thresholds defined by the e-merchant:
- Green, which means the transaction is not risky;
- Orange, which expresses a potential risk that needs to be investigated further by the e-merchant, based on the data we will provide, in order to validate, or not, the transaction;
- Red, which, as its name implies, identifies a transaction with a proven risk and blocks it automatically.
We also offer e-merchants a support service by our fraud experts. This offer, primarily designed for very large e-merchants, consists of an audit of their fraud records in order to present them with tailored strategical recommendations that they should put in place in order to optimize the protection of their business.
Thank you for your time today. I will leave you with one final question before we leave: In your opinion, in a century, what will be the invention/innovation that will have changed the world?
Thanks to robotics and artificial intelligence, mankind will be able to free itself from some tasks that will be performed automatically and optimally, therefore allowing us to focus on creating value and innovations.
Fraud will therefore no longer be a constraint for e-merchants as their systems will be autonomous in the identification of risks. But won’t fraudsters be also equipped with better performing artificial intelligence?