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Todd Clark
Todd Clark
• First Data and STAR
Network overview
• Competitive advantage
• Fraud in emerging
payments
• Fraud innovation – what’s
coming
Topics
2
Confidential and Proprietary
© 2016 First Data Corporation. All Rights Reserved.
Introducing Todd Clark
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Background Entrepreneur – Core Data Resources
Leader at Concord EFS
Sales leader at First Data and Feedzai
Executive at Cardtronics
Head of STAR Network – First Data
Other Interests Section hiking the Appalachian trial with his wife
House champion ping pong player
Confidential and Proprietary
© 2016 First Data Corporation. All Rights Reserved.
First Data • New management team with deep expertise leading
global organizations in technology, financial services,
payments, cyber-security, operations and controls
• Aligned behind the company’s ambition to deliver next-
generation commerce-enabling technologies that help
drive growth
• Accelerated focus on innovation including the acquisition
of six commerce-focused technology start-ups in the last
three years
• Legacy of partnerships with some of the world’s leading
technology companies to deliver commerce-enabling
solutions
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Moving at the speed of commerce
Confidential and Proprietary
© 2016 First Data Corporation. All Rights Reserved.
Large
SCALE
6 million+ business locations
4,000 financial institutions
First Data by the numbers
Global
LEADERSHIP
#1 merchant acquirer
Global
FOOTPRINT
118 countries with First Data clients
36 countries with First Data operations
24 years global operating experience
23,000 owner-associates worldwide
1 million STAR® locations
74 billion 2014 global transactions
$1.9 trillion
#1 issuer processor
#1 Independent debit network
28% of global ecommerce processed
25% of segment revenue generated outside of the
U.S.
First Data’s industry leadership and large scale give us unique operating advantages
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© 2016 First Data Corporation. All Rights Reserved.
First Data is at the Intersection of Commerce
© 2016 First Data Corporation. All Rights Reserved.
Size &
Complexity
Size & Complexity
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<2 locations
<5 employees <$1M sales
2-10 locations 5-50 employees $1-10M sales
10-25 locations 50-100 employees $10-70M sales
>25 locations >100 employees >$70M sales
SMB
Mid-Market
National/ Global
Regional
Prepaid
Gift
Loyalty &
Offers
Clover
Mini
Clover
Mobile
Clover
Station
Data &
Analytics
Mobile Solutions
eCommerce
Solutions
Retail Private Label
Cards
Payroll
Solution available for client segment
Solution in development for client segment
uCommerce eCheck
Acceptance Security Cross-Border
Solutions
GlobalChoiceTM
Lending &
Leasing
Clover Go
Comprehensive Suite of Commerce Solutions Our approach to innovations addresses how to improve commerce to be frictionless
Debit &
PINLess
MORE PROTECTION STAR provides market
leading fraud solutions that protect your brand
MORE POWER STAR + First Data = the hub of the
payment ecosystem with a 360 view
and the scale to leverage all players
MORE REACH STAR is the only Network with
market share to provide you a
viable alternative
MORE CHOICE STAR increases choice and
competition to allow you to compete for best economics on every
transaction
MORE PROFITS STAR’s competitive pricing and
simple and transparent fee structure
allow you to grow net income and improve your bottom line
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By the Numbers
4.6 Billion Transactions processed per year
116 Million STAR branded debit cards
446,479 STAR ATMS
3,600 Financial Institution Members
The Product Suite
STAR® Network Acceptance
PIN Debit, PINless
STAR AccessSM Signature Debit
Fraud & Risk Management
ATM | POS | eCommerce |eBiller
STARsf® Surcharge Free ATM
Mobile Payments
New Releases
STAR PINless
Increase cost-effective debit transactions
• Quicker, hassle-free checkout experience
• Allows consumers to skip
the PIN pad on purchases $50 or less
STAR AccessSM
Provides a signature debit alternative to
Visa/MC
• A multi-phased initiative to expand debit
transaction support across the STAR ® Network
STAR® Network – Touches All Parts Of The Commerce Ecosystem
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© 2016 First Data Corporation. All Rights Reserved.
Over 9 Million Merchants Accepting Debit
Devices:
• Magnetic Stripe Card
• Chip Card
• Companion Cards e.g. Fobs, Mobile
• Mobile Devices (using Secure Elements or Secure Database e.g. cloud-based)
• Desktop Computers
Cardholder Verification Methods (CVM):
• PIN
• Signature
• PINless (No CVM)
• Secure authentication options for Cardholder Not Present payments
Channels:
• ATM
• In Store POS
• Internet eCommerce
• Biller Websites, Kiosks, IVR, Call Center
• In-App (Issuer or Acquirer mobile payment applications)
The Power of the Network
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PINless Debit- Transaction Savings –QSR Case Study
PINless Debit
Results: Reduced Transaction costs 40-45% over
current V/MC NO CVM transactions
• Pilot met the customer’s expectations
• In process of currently rolling out 5,000 store of
corporate & franchise locations
Background: • First Data estimated client would reduce transaction costs on 40%
to 60% over their current V/MC NO CVM transactions (average of
$.01 to $.03 per transaction)
Pilot: • Validate the impact and cost savings for ~50 merchants
Results: • The customer experience from using a PINless Debit
transaction did not differ from that of doing a V/MC NO CVM
transaction
• Per transaction savings were in line with the estimates
provided during pre-pilot ROI analysis
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Prevention Manage risk with
powerful , real-time
solutions to help
combat fraud and
identify theft.
• Card Activation
• Authorization Name Match
• CardValue (CV) Validation
Detection Identify fraudulent
transactions, and limit
losses with real-time
authorization scoring
and neural network
technology.
• Fraud Risk Identification Services
• FOOTPRINTS® Online – Internal
Fraud Monitoring
• FICO™ Card Alert Service –
Fraud Manager
Prediction Adding more value to
our suite of fraud
solutions with STAR
Prediction - our
best-in-class fraud
score.
• Focused on intelligent and
predictive capabilities to
address additional risks
associated with signature and
other CVM transactions.
Coming Spring 2016
Fighting Fraud with
Authentication Attract new and
existing customers
with state-of-the-art
authentication tools
while minimizing
identity theft risks.
• SafeID Verification Score
• SafeID Questions
• SafeID Address Score
• PIN NowSM
• Verified by VISA®
• MasterCard® SecureCode™
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Fraud Score Differentiators
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Modern
Machine Learning
Speed of Learning Breadth of Data
Differentiators
The most
Powerful Collection of
Data
Feedback Loop
Use Cases Drive Data Sources
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• PIN, PINless, All other
Signature Debit,
including
eCommerce/CNP
• Fraud Chargebacks
• Merchant Account
Info
• Near Real-Time and
Batch Feeds
First Data Merchant Acquiring
Breadth of Data
First Data Issuing (In partnership with our Issuers)
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STAR Network Data
• PIN, PINless, ATM,
STAR Access, e-
Tailer, and Bill Pay
• Confirmed Fraud
• Fraud
Chargebacks
• Negative File
• Real-Time, Near
Real-Time, and
Batch Feeds
• Cardholder Management &
Authorization System
• Cardholder Profile
• Confirmed Fraud
and Fraud Chargebacks
• Fraud Data from FD Issuing Systems
• Near Real-Time and Batch Feeds
Speed of Learning
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Models updated immediately with new intelligence– self discover patterns
Ability to implement new data sources to enhance the model
Continuous machine learning based on behavioral patterns
Real-time data used to actively re-train models after each transaction
Models Make a Difference
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Global Brand Neural Networks
Opportunity Areas
Cannot handle different input types
Cannot handle missing values Not scalable Slow to train new models Needs tuning
STAR Machine Learning
Best-in-class
Generalizes patterns well Robust to different input types
(text, numbers of different scales, etc.), missing data and outliers/errors
Fast to train and score Requires less tuning
STAR’s Goal Highest Approval Rates and Lowest Fraud
Test Results – Key Findings
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High detection of fraud
• Detected 72% of fraud transactions
• 73% detection of fraud dollars
Low number of false positives
• For threshold > 800, model has 1:1.97 False Positive ratio
• .19% False Positive rate
More data improves the model
• Up to 10% improvement with more data added to model
© 2016 First Data Corporation. All Rights Reserved. 19
Todd Clark
Head of STAR
O 404-890-2479
M 770-757-6599
Dean Nolan
STAR Merchant Sales
O 704.469.5102
M 704.953.4225
Thank You For Your Time
