Future of Commerce: A Training Program for AFI Member ... · $4.9 $6.3 $2.1 $4.3 2018 2023 forecast...

Future of Commerce: A Training Program

for AFI Member Institutions

Kuala Lumpur, Malaysia

4-5 July 2019

Nicholas D LeeVP & Head of AP Digital Product

Commercialization

Securing Digital Commerce

©2019 Visa. All rights reserved. 3 | 2019 Security Summit Visa Public

The number of connected devices will be

more than 3x theglobal populationby 2022

Source:: Cisco Visual Networking Index: Forecast and Trends, 2017–2022 White Paper

https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-

vni/white-paper-c11-741490.html

3 | 2019 Security Summit ©2019 Visa. All rights reservedVisa Public

https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/white-paper-c11-741490.html


63% of all eCommerce payments take place on a mobile in AP

Source: eMarketer, “Worldwide Retail and Ecommerce Sales: eMarketer’s Updated Forecast and

New Mcommerce Estimates for 2016—2021,” Jan 29, 2018



75% of all eCommerce payments are abandoned globally

Source : Statista 2017 Worldwide, Q4; 500 global brands



$4.9$6.3

$2.1

$4.3

2018 2023 forecast

Card Present

eCommerce

15%CAGR$7T+

$10T+

5%CAGR

Ecommerce payment

volume is growing

3x faster than in store payments

2018 Actuals based only on Settled Payment Volume processed directly over Visa or certain Visa-Affiliated Networks. CNP defined as ECI codes 2, 5-9; CP defined as all other codes, which is a proxy for ecommerce and may not completely categorize ecommerce volume correctly due to regional differences in reporting. 2023 forecast growth for ecommerce is based off Visa’s 2012-2017 CAGR, averaged with eMarketer’s Worldwide Retail & Ecommerce Sales 2016-2021 forecast of growth. CP 2023 forecast based solely off Visa’s 2012-2017 historical growth. Forward-looking estimates are not guarantees of future performance and should be used for educational purposes only.


Manual PAN key entry is ~50% of ecommerce

4234 5678 9010 0000

Source: 2018 Visa global card not present data 7 | 2019 Security Summit

Credit Card Number

Expiration Date

05/2022

CVV

***

©2019 Visa. All rights reservedVisa Public


99%Globally, authorisation rates are lower than in store

Visa authorizations, 2017 Q4, Visa branded cards on Visa Networks, including Interlink

In-Store eCommerce

86%


Sources: 1) 2018 Visa net data comparing CNP to COF2) Experian, State of Online Shopping Fraud 2019, https://www.experian.com/blogs/ask-experian/the-state-of-online-shopping-fraud

In-Store eCommerce

1x 5xFraud rates higher than in store & growing ~2x faster


Responsible innovation

Security has to keep moving

at the speed of innovationResponsible innovation



Visa is focusing on 5 key pillars to Securing Digital Commerce

Visa

Tokenisation

Visa Digital

Commerce Program

Secure Remote

Commerce

Cloud Token

Framework Card on File

Tokenisation

3DS 2.0



Visa Digital Commerce Program key features provide

Enhanced security

Eliminate PAN entry and storage

Domain restricted network tokens

Device binding and consumer authentication

Utilises increased device data for contextual

risk management

Card art enhances consumer trust

Simplification of digital payments

Stay signed-in for known customer

Future proof across new channels

and devices

Optimal, consistent UX within merchant’s

existing checkout environments

Standards-based implementations

Improved authorisation rates, reduced

abandonment


Visa Tokenisation



Visa tokens enhance digital commerce

Card

Art

Device

Binding

Lifecycle

Management

Domain

Controls

Cryptogram

Remove

PAN


Visa Token journey since its inception

Wearables

Secure

Remote

Checkout

IoT &

Future

Use Cases

P2P

Consumer

& Merchant

QRCard

on File

2014 2015 2016 2017 2018 2019 2020+

Pays &

Wallets

All brand names and logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with Visa


Authorisation rate lift1

3.2%Average

Visa Token performance is clear

1. Authorization approval rate lift for Card Not Present transactions processed as a Token vs. as Non-Tokenized credential. 3.2% average lift (3.2 percentage point increase) across sample of top U.S. merchants accepting Token transactions. Lift calculated by averaging auth rate improvement seen across samples of top merchants

accepting Token transactions via third party Token Requestors with lifts seen by merchants acting as own Token Requestor. (In total, sample included 22 merchants across 6 different Token Requestors.) Source: VisaNet, Jan-March 2019, Brand: Visa. US-Issued Cards at US Merchants. Transactions deduped and controlled to credentials

linked to a provisioned Token and Token auth attempted. Auths excluding Condition Code 51. Auth rate defined as approved count of unique transaction authorizations, divided by total unique transaction auths attempts. Auth rate includes first attempt, as well as subsequent retries on same credential type.

2. Fraud Rate Reduction: Source: VisaNet, Jan-Dec’18, U.S. Issued Cards at all U.S. merchants, Gross Fraud only. Fraud reduction for Card Not Present transactions processed via Token vs. PAN. Fraud reduction calculated across all Token Requestors. Weights for PV($) and Tran Count(#) for TRs was adjusted in accordance with Visa’s data

confidentiality obligations by reducing weight of any TR contributing to more than 50% weight (if any) to 50% and then distributing remaining weight (50%) into other TRs based on their original relative weights.

Note - Authorization and Fraud rate improvement can vary from merchant to merchant due to a variety of factors (including merchant’s existing performance, merchant’s usage of other tools etc.), which could result in a merchant’s auth or fraud benefit being higher or lower than average from this sample.

Fraud count reduction2

67%Average


©2019 Visa. All rights reserved. 17 | 2019 Security Summit Visa Public17 | 2019 Security Summit

Secure Remote Commerce



Three areas of standardisation for the digital world

This document is intended for illustrative purposes only. It contains depictions of a product currently in the process of deployment, and should be understood as a representation of the potential

features of the fully-deployed product. The final version of this product may not contain all of the features described in this presentation. This slide depicts programs, concepts and details under

continuing development by Visa. Any Visa features, functionality, implementation, branding, and schedules may be amended, updated or canceled at Visa’s discretion.

Secure Remote Commerce (SRC)

18 | 2019 Security Summit

Common UX and

acceptance mark

…to enable digital POS

Cardholder

verification methods

Password-free experiences

Common data played

Token Data protection

and management

321

©2019 Visa. All rights reserved

Visa Public


MultipleIntegrations

and buttons

We’re moving from this…..

Up to

23 steps to checkout


Cart Page Payment Method

SelectionOrder Review Confirmation Page

illustrative design and SRC Mark

Note: UX/UI shown (including CVM) is a potential extension of EMV SRC specification.

All brand names, logos and/or trademarks are the property of their respective owners, are used for

identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

To a simple and secure experience

WE ACCEPT


Cloud Token Framework



Digital Marketplaces accessed from multiple accounts

A cloud token enables a single experience across devices within an operating system

Music Exercise Food Delivery

Ride Hailing

Video Streaming

Social Utilities Seller Marketplace


Device Binding

Visa Cloud Token Framework

Issuer Step-Up Capabilities

Consumer Authentication

Enriched Data

End-to-End Secure Scalable Framework for E-commerce Tokenization



Card on File Tokenisation



Card on File Tokenisation

Recurring / subscription

Transactions

Consumer Initiated

Transactions

Merchant Initiated

Transactions

~ 6% approval rates

~ 2% approval rates~ +8% approval rates


3DS 2.0


©2019 Visa. All rights reserved. Visa confidential27 | 2019 Security Summit

Digital commerce fraud mitigation requires a multi-layered approach

Authentication Tools

• Transaction based

authentication

• Password-less

• Advanced verification

(ie. Biometrics)

• Issuer Authentication

• Stay signed in

• Password-less

• Advanced verification

(ie. Biometrics)


• Device data

• Secured credentials

• Device binding


TokenPAN

©2019 Visa. All rights reserved. Visa confidential


Digital Security Roadmap

ActivityQ2 2019

Apr May Jun

Q3 2019 Q4 2019 Q1 2020 Q2 2020

Subject to Change

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Card on File

ReadinessOngoing VTS/TR integraton, issuer provisioning and authorisation optimisation

Cloud Token

FrameworkVisa Tech Letter Issuer integration begins

EMVCo common mark

& specifications

Visa Checkout migration begins

SRC

Scale SRC via third party enablers

3DS 2.0AP 3DS 2.0 Activation

Future of Commerce: A Training Program

for AFI Member Institutions

Thank you

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