Post on 10-Apr-2022
transcript
3-D Secure 2014 benchmarking study for Airline & Travel industry
Airline & Travel industry 3-D Secure practices
The Airline & Travel industry relies on online channels to generate revenues. Compared to other industries, the average basket value is very high, making it an attractive target for fraudsters. It is therefore essential for merchants of this industry to choose the best use of all relevant fraud prevention solutions, including 3-D Secure authentication.
METHODOLOGY USED FOR THE BENCHMARKING STUDY
This 3-D Secure benchmarking for the Airline & Travel industry involved a review of 38,665 946 transactions made between January, the 1st of 2014 and November, the 15th of 2014. The transactions involved 4,601 webshops. 106 merchants have responded to the survey in order to better understand 3-D Secure adoption and practices according to country, merchant location and business type.
Survey respondents
Company annual revenue Industry Region
>1b$ 47
500m-1b$ 14
300m-500m$ 9
100m-300m$ 16
50m-100m$ 6
10m-50m$ 8
10m$ 6 Airline 75
Other travel industry companies 14
OTA* 17
Europe 42Middle East 14
North America 16South America 5
Asia 19Oceania 7
3-D Secure is a security protocol designed namely by Visa and Mastercard. As an additional security layer, it helps merchants to reduce fraud risk, yet adds an extra step in the payment purchase. The purpose is similar than PIN code or writing a signature for a transaction on a physical transaction. In practice, enrolled issuers implement an additional step of consumer authentication.
3-D Secure has been designed to allow merchants to:• Reduce their online fraud• Mitigate their risk (when liability shift applies)• Obtain reduced interchange fees
Issuers have implemented very heterogeneous authentication methods for 3-D Secure:
• Static password• Dynamic and unique password• Risk based authentication
• Card reader• Digipass entering a PIN code • ...
3-D Secure
JCBJ/Secure
The results show how much 3-D Secure policy impacts internal departments in a company. The way 3-D Secure is handled impacts the revenues of a company, the risk management and the fraud prevention.
Who decides about 3-D Secure policy in the company:
E-Commerce Payment Finance Fraud Others
36 %
14 %25 %
13 % 18 %
Rom
ania
Nethe
rland
s
United
Ara
b Em
irates
Saud
i Ara
bia
Egyp
t
Belgium
Unite
d Kin
gdom
Sing
apor
e
Fran
ce
Switz
erland
Spain
Ireland
Russ
ia
Chin
aIta
ly
Austra
lia
Germ
any
Austri
a
Portu
gal
Swed
en
Japa
n
Norway
Cana
daPe
ruCh
ile
Brazil
Argen
tina
Unite
d St
ates
Colom
bia
Mex
ico
3-D Secure adoption per card country:
Share of card transactions authenticated with 3-D Secure (Source: Sample of Ingenico 2014 transactions data in Airline & Travel industry 38m transactions).
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
America (North & South) & Oceania EuropeMiddle East & Arabic countries Asia
* Online travel agencies
IMPACT OF 3-D SECURE ON CHARGEBACKS
Decrease of chargeback rate when using 3-D Secure
Decrease of chargeback rate when using 3-D Secure - per industry
Decrease of chargeback rate when using 3-D Secure - per region
Airline
OTA*
Other travel industry companies
Decreased by 25% to 50%
I don’t know
Decreased between 10% and 25%
Decreased more than 50%
Decreased by less than 10%
Decreased by 25% to 50%
I don’t know
Decreased between 10% and 25%
Decreased more than 50%
Decreased by less than 10%
0-10%
10%
10-25%
8%
25-50%
8%
50%+
23%
I don’t know
51%
As the survey results point out, 3-D Secure shows a significant and positive impact on chargebacks and fraud decrease while also negatively impacting conversion and revenues. Online Airline & Travel webshops therefore implemented diverse 3-D Secure practices. See hereafter.
IMPACT OF 3-D SECURE ON DROP OFF
Drop off increase when using 3-D Secure
Drop off increase when using 3-D Secure - per industry
Other travel industry companies
Airline
Increased by 25% to 50%
I don’t know
Increased between 10% and 25%
Increased moret than 50%
Increased by less than 10%
28%
5%3%
41%
23%
0-10% 10-25% 25-50% 50%+ I don’t know
OTA*
Drop off increase when using 3-D Secure - per region
Increased by 25% to 50%
I don’t know
Increased between 10% and 25%
Increased moret than 50%
Increased by less than 10%
* Online travel agencies
Usages of 3-D Secure - per industry
All the time 31% Flexibly 53%Not at all 16%
All the time 31% Flexibly 53%Not at all 16%
Usages of 3-D Secure - per region
When do merchants use 3-D Secure in a flexible way?
54%Card country46%Fraud risk score
Itinerary 33%Others 25%Time of bookings 25%Issuing bank 25%Device type 21%Amount 21%IP country 21%Regulation 13%
Airline
OTA *
Other travel industry company
USAGES OF 3-D SECURE
All the time 31% Flexibly 53%Not at all 16%
* Online travel agencies
DISCOVER FLEX3DS
3-D Secure levels of adoption and drop off rates vary greatly across the world. It is important to take into account local online behaviour and to adopt a selective 3-D Secure approach when selling internationally. Increasingly, more online businesses are implementing such an approach.
With Flex3DS, Ingenico Payment Services offers merchants an easy-to-use and highly flexible tool that activates and deactivates 3-D Secure based on transaction context.
Merchants using Flex3DS can, in a few clicks, define the activation of 3-D Secure based on the risk associated with the transaction (via Ingenico Fraud Expert suite). The issuing country of the card used, the purchase amount, the channel, and other variables can be factored into the decision-making process.
When combined with the Flex3DS feature, Ingenico advanced fraud prevention solutions provide a complete set of sophisticated tools to help merchants find the best balance between fraud prevention and revenue optimization.
ABOUT INGENICO PAYMENT SERVICES
Ingenico Payment Services provides a comprehensive range of secure payment services to enable merchants to consolidate payment channels and optimize financial services. Supporting 150 international and local payment methods, we help merchants to manage, collect and secure payments and prevent fraud on digital transactions. Ingenico Payment Services is part of the Ingenico Group, the global leader in seamless payment.
ABOUT AIRLINES INFORMATION NETWORK
Airline Information is an established leader and innovator in commercial aviation conferences. Since 2005, Airline Information has hosted thousands of airline and travel professionals at the company’s groundbreaking conferences, forums, workshops and networking events. Airline Information is also home to the airline industry’s most forward-thinking research in loyalty and merchandising. Airline professionals, marketers, investment firms and industry suppliers turn to Ai for the latest trends, advisory and industry guidebooks.
3 TIPS FOR A FLEXIBLE 3-D SECURE APPROACH
Combined criteria based and risk score selective activation of 3-D SecureExample: - If risk is high and/or country is Netherlands • 3-D Secure
- If risk is low and/or country is USA • no 3-D Secure
Define how the 3-D Secure authentication result will influence the risk score Example: - If authentication is successful, reduce risk score and override blocking rules
Propose guaranteed payment method as fall back to risky & non 3-D Secure authenticated ordersExample: - If authentication isn’t successful, propose a guaranteed payment method
Payment Checkout
Fraud Detection Tools
DeclinedPropose a guaranteed payment method
Declined Declined Declined
Authorisation request
FLEX 3DS
3-D SECURE
AUTHENTI- CATION
REVIEW RISK
SCORE
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2
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