Overcoming paymenthurdles in e-business

Albert Dias, M&T Director

You have an idea

Your options

Setup

Transact

Maintain

Mobile

Risk

Pre-paid cards

Free

2–7%

Easy

Varies

Low

Direct debit

$1k +

< 2%

Varies

Poor

Low

Credit cards

$0–2k

2–4%*

Varies

Varies

High

Debit cards

$1k +

2–4%*

Varies

Varies

High

How do pre-paid cards work

MerchantCard

provider

How does direct debit work

Merchant

Gateway

User’s bank

How do credit/debit cards work

Merchant Gateway

Card

association

Card issuer

3-D Secure

Merchant acquirer

A choice of two models

Three-party

> Pay at gateway

> Merchant needs SSL

> Gateway liable for card

> Basic fraud detection

> Checkout drop-off risk

Two-party

> Pay at merchant

> Merchant needs PCI-DSS

> Merchant liable for card

> Detailed fraud detection

> Low checkout drop-off

Credit/debit card types

Accept

Transact

Maintain

Risk

Regular

High

2–4%*

Varies

High

Corporate

Medium

2–4%*

Varies

Very high

Closed group

Very low

0–3%*

High

Very low

What is 3-D Secure

> It’s not your 3-digitCard Security Code

> Issuer authenticates information that isn’t printed on the card

> Reduction in fraud

> Lower merchant liability

How do you reduce card fraud

> Step into the shoesof a criminal

> Use collaborative fraud assessment tools

> Score your risk and set your comfort zone

> Don’t be afraid to verify

> Learn and remember

Score your fraud risk

Common flags

> Suspicious cards

> Haste

> User location

> Local knowledge

> Suspicious history

Business-specific flags

> Close travel

> Unusual routes

> Expensive trips

> Strange company

Why not just e-business?

> Establish direct payment with your customers

> Simplify transactions

> Understand the risks

> Establish your threshold

> Works well for volume

> Tap into conservative corporate markets

Overcoming paymenthurdles in e-business

Albert Dias, M&T Director