1

GEARING UP:HOLIDAY SEASON PLANNING GUIDE

PREPARING FOR SUCCESS

2INTRODUCTION

With a stronger global economy, 2018 consumer expenditure is expected to grow at its

strongest rate since 20111. ACI understands that success for merchants and retailers has

never been more critical.

We crafted this eGuide to provide you with the latest insights and information you need

as you plan and prepare for the holiday season.

1INTRODUCTION

THIS eBOOK IS INTENDED TO PROVIDE:

Timelines and milestone dates you’ll find important for planning

Spotlight areas to drive success within your business

Key resources and information for peak season

75% of consumers globally are very interested in receiving a call or SMS messaging to their mobile device to help mitigate fraud2.

Only 43% of global consumers trust merchants to protect personal data2.

Globally 80% of consumers think their mobile wallet’s personal and financial information is secure2.

Consumers are upbeat: Over 25% are spending more on products and experiences this year2.

Worldwide, the #1 security concern is theft by computer hacking2.

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Internal supplemental audit and testing

• Review and test systems:

- Infrastructure

- Storage

- Applications

- Databases

External vendor/partner preparedness

• Communicate updated peak estimates to

vendors to assist in their management of

cumulative resource needs

• Communicate special requirements or

requests to vendors early

• Validate vendor preparedness

• Obtain support and escalation resources

and align with internal teams

Create a plan and communicate, communicate, communicate

• Plan based on estimates plus a healthy margin:

- Capacity

- Staff

- Interoperability

Create and enact communications plans

• Establish internal communications processes

across business units, including “what if”

scenarios and contingency actions, and

assign responsibilities and escalation points

• Create external communications plans,

pre-draft content where possible, and assign

responsibilities, resources and escalation

paths, and set expectations

AREAS TO CONSIDER WHEN DEVELOPING YOUR PREPAREDNESS PLAN

2

OPERATIONAL READINESS

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ACI FRAUD EXPERT INSIGHTS

During the holiday season volumes spike,

both genuine and fraudulent consumer

behaviors change and pressure mounts.

Opportunities increase for fraudsters —

and maintaining the right balance between

customer experience, sales conversions and

risk mitigation becomes even more critical.

Poorly planned holiday season fraud

strategies risk disappointing your genuine

customers, pushing them into the arms

of competitors and inviting fraudsters to

target your business, resulting in higher

chargebacks.

Adjusting your fraud strategy ahead of

and during the holiday season is crucial.

Recognizing your existing customers even

if they are displaying unusual shopping

characteristics during this time is key for

both customer experience and also for your

conversion rates

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Erika DietrichLeader of Global Risk ServicesACI Worldwide

22% was the increase in fraud

attempts in the period from

Thanksgiving to December 31

in 2017 compared to 2016. So,

despite the sales uplift (overall

transactions increased by 19%),

one out of every 85 transactions

was a fraud attempt3.

Erika Dietrich leads ACI’s Global Risk Services

team and is a member of the Merchant Risk

Councils Americas Advisory Board (AAB). She

is a certified eCommerce fraud professional with

more than 15 years’ experience in data analytics

and fraud detection and prevention strategy

management

22%

FRAUD READINESS

5

In this Q&A, Erika Dietrich, Leader of Risk Services, shares advice on how merchants can best

prepare their fraud management strategies for the holiday season.

TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON

DID YOU KNOW... In recent years at ACI,

we have seen 78% of

fraud attempts come

from customers with

no account history

with a merchant4.

78%

Q2 Beyond software, what else can merchants do?

ED: You must understand your weak points.

If you were compromised before, be sure

that gap has been addressed and tailor your

strategies to ensure it doesn’t happen again.

If something like delivery fraud was a problem

before, identify the postcodes which need

higher review rates and re-focus reviews and

resources from areas which pose less risk.

Also, be sure to consider anything that’s

changed since your last peak period. Are

there new product lines, sales channels,

payment methods and delivery options? Are

these initiatives protected with specific and

tailored fraud rules and strategies? Be sure

to account for everything of this nature when

planning.

Q3 How can merchants maintain security and deliver a great customer experience?

ED: It starts with first being mindful of the

customer experience. Fraud solutions must

be complementary to a great experience.

Identify your loyal customers and their

preferred channels. Customers today are

using many devices and methods to shop,

and it’s important to recognize and enable

this audience.

One way to do this is to use customer

profiling and time-on-file techniques to

maintain the customer experience for valued

customers and ensure good transactions

are still accepted. This provides a good

experience while still being strong enough to

recognize popular attack methods, such as

account takeover.

Q1 What initial steps should merchants take to prepare their systems?

ED: First, I would recommend deploying

automated risk strategies. Doing this can help

to reduce manual review rates and lower call

center expenses, which will help to control

the demand on internal resources, who can

then focus their energy in other directions.

Next, be sure to utilize early warning

indicators. Access to these tools, such as

acquirer-reported fraud, will help to quickly

reduce your exposure and mitigate losses.

These are great places to start.

FRAUD READINESS

6

TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON

Q5 How important is it to gain internal alignment?

ED: Very! You must speak with your

colleagues to gain alignment and clarity.

Cross-functional communication (with IT,

finance, customer services and marketing)

can build a picture of previous efforts and

outcomes which will then inform this year’s

decisions.

It is essential that you gain a 360-degree

view of your organization’s season campaigns

and promotions. Make sure you are aware

of anything that may inadvertently provide

opportunities for fraudsters. Raise your

concerns about potential problems and offer

solutions that are informed by your fraud

monitoring processes, analytics and reporting.

Now that you know of the season plans,

adjust your rules accordingly to allow for

the potential changes in genuine customer

buying behavior. After all, a successful

campaign will drive more sales and possibly

form new channels and customers. Your

marketing department will be quite happy to

see their efforts rewarded by a fraud solution

that welcomes these new, good transactions.

Q4 Can you speak a bit on the need for proactivity and manual reviews?

ED: Absolutely. Merchants must be fully

aware of the hot spots and trends in fraud,

especially the trends found within your

system. For example, analyze and monitor the

cards, IP and email addresses that pose the

biggest threat. Once you identify them, factor

them into your rules and alert triggers.

The data at your disposal is invaluable, and

I would recommend using as much of it as

you possibly can. If possible, dedicate one

individual into looking holistically at data

and trends, including decisions, individual

performances, rules, volumes and KPIs.

Remember, every review you complete adds

to the fraud intelligence information you can

use to inform your decision making.

Also, be aware of the other parts of the

process that trigger declines — 3D Secure,

AVS/CV2 responses and bank declines. You

must be prepared to manage those, as they

can trigger multiple customer attempts,

putting further pressure on your already-

stressed website.

Finally, explore the use of silent rules

and reporting tools to screen lower-risk

transactions.

Merchants need to understand their peak days and the sales that drive those high-velocity times to ensure risk strategies are effective and efficient — with low genuine consumer friction and high fraud detection.

FRAUD READINESS

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TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON

Q7 We’re ready to go. Now what? Continue to monitor and update.

ED: Stay vigilant. Monitor your systems

and update as necessary. Your business

intelligence tools and real-time monitoring

give you the power to make up-to-the-

minute decisions and provide faster

responses. Use them to their fullest. Don’t

wait until after the peak is over to see how

and where you can improve. Employ rapid

access to fraud intelligence to inform rules

changes in real time.

Q6 Beyond marketing, finance and IT, what other teams should you be working with?

ED: Engaging with your web and mobile site

security management is a must. Give these

teams the tools, techniques and procedures

to detect, contain and mitigate botnets

(which we predict will account for the highest

number of events during the peak season).

These events overtake accounts, impact site

resources and result in losses.

We recommend regular communication with

these teams on a scheduled, often daily, basis

during the holiday period. And considering

the presence of both good and bad bots,

you must put business policies into place to

address this issue with clarity for both teams.

FRAUD READINESS

30%16%

eCommerce Fraud eCommerce Sales

eCOMMERCE FRAUD GROWS NEARLY TWICE AS FAST AS SALES5

Growth rates in 2017

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ACI SOLUTION SPOTLIGHT

Preventing the unrelenting threat of fraud in

today’s payments world means employing

protection that’s not just real time but

anytime.

ACI ReD Shield® delivers real-time, multi-

tiered protection that’s tailored to the needs

of eCommerce merchants, payment service

providers (PSPs) and independent sales

organizations (ISOs).

This intelligent fraud detection and prevention

solution is delivered as a managed service

through an expert team of payments risk

analysts and provides instant decisions

(accept/challenge/deny) on eCommerce and

mCommerce transactions.

4ReD Shield enables merchants to:

ACI SOLUTION SPOTLIGHT

Detect and prevent online fraud

Maximize sales revenues

Reduce chargebacks

Reduce manual reviews

Minimize false positives

Support business expansion into

new markets, sales channels and

payment types

Detect and manage domestic

and cross-border payments

fraud across all payment types

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With the positive profiling capabilities of

the ReD Shield Stream Analytics Engine,

hundreds of other merchants across the

ACI global consortium database enrich

your customer and fraud data to power:

• Increased understanding and visibility of

customer behaviors

ACI SOLUTION SPOTLIGHT

Machine Learning Models

Over the past year, ACI has updated and

enhanced a number of its segment-specific

models, including our travel, gaming and

retailer models. The models are designed

to achieve higher fraud detection rates with

lower false positive rates. The models use

history from all consumer transactions across

ACI’s consortium data set.

ACI DELIVERS • Greater than $100M in fraud detected

by ACI segment model

• Model detects approximately 50% of

all potential fraud transactions

• Model false positive ratio less than 7:1Only 3% of chargebacks have an email age of more than 31 days

30% of new customers have history elsewhere with ACI

17% of existing customers have more history at a global level across merchants

84% of fraud is on emails with less than eight days history

• More customized and tailored rules

based on comprehensive risk profiles

• Enhanced accept rates and reduced

chargeback rates

• Better control and decision making

With the ReD Shield Stream Analytics Engine, we found on average that6:

Stream Analytics Engine

ACI SOLUTION SPOTLIGHT

Source: ACI (based on customer data)

CLICK HERETO LEARN MORE

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October September November December January 2019 February March22 - Thanksgiving

23 - Black Friday

26 - Cyber Monday

11 - Green Monday

15 - Free Shipping Day

22 - Super Saturday

25 - Christmas

26 - Boxing Day

October September November December January 2019 February March22 - Thanksgiving

23 - Black Friday

26 - Cyber Monday

11 - Green Monday

15 - Free Shipping Day

22 - Super Saturday

25 - Christmas

26 - Boxing Day

KNOW YOUR DATES AND MILESTONES

October September November December January 2019 February March22 - Thanksgiving

23 - Black Friday

26 - Cyber Monday

11 - Green Monday

15 - Free Shipping Day

22 - Super Saturday

25 - Christmas

26 - Boxing Day

Click or hover over the buttons to read more

Peak traffic dates

vary by region

RESOURCES

5ADDITIONAL RESOURCES

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We hope you found this eGuide useful as you begin planning for the

upcoming holiday season. Should you want more information, or if you’d

like to schedule a complimentary fraud preparedness consultation, please

feel free to contact us.

Much like your shelves are stocked with great buys, our shelves are stocked with expert

insights and resources to help you succeed all year round.

• ACI ReD Shield Overview

• Global Fraud Management Survey

• Selecting the Best Fraud Detection Model for the Business

• Driving Up Conversion with Effective Fraud Management

LET ACI MAKE IT A HAPPY HOLIDAY

65% OF CONSUMERS INDICATED THEY WOULD STOP SHOPPING WITH A GIVEN MERCHANT AFTER EXPERIENCING FRAUD OR DATA BREACH

Source: 2017 ACI Fraud Survey

RESOURCES

ADDITIONAL RESOURCES

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ACI Worldwide®, the Universal Payments® (UP®)

company, powers electronic payments for more than

5,100 organizations around the world. More than 1,000

of the largest financial institutions and intermediaries,

as well as thousands of global merchants, rely on

ACI to execute $14 trillion each day in payments

and securities. In addition, myriad organizations

utilize our electronic bill presentment and payment

services. Through our comprehensive suite of software

solutions delivered on customers’ premises or through

ACI’s private cloud, we provide real-time, immediate

payments capabilities and enable the industry’s most

complete omni-channel payments experience.

Americas +1 402 390 7600 Asia Pacific +65 6334 4843 Europe, Middle East, Africa +44 (0) 1923 816393

© Copyright ACI Worldwide, Inc. 2018 ACI, ACI Worldwide, ACI Payment Systems, the ACI logo, ACI Universal Payments, UP, the UP logo, ReD, PAY.ON and all ACI product names are trademarks or registered trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in the United States, other countries or both. Other parties’ trademarks referenced are the property of their respective owners.

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WWW.ACIWORLDWIDE.COM

@ACI_WORLDWIDE

CONTACT@ACIWORLDWIDE.COM

LEARN MORE

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1 page 2 log.euromonitor.com/2018/01/explore-the-top-10-global-consumer-trends-for-2018.html2 page 2 www.pwc.com/gx/en/industries/consumer-markets/consumer-insights-survey.html3 page 4 www.aciworldwide.com/insights/expert-view/2018/september/positive-profiling4 page 5 www.aciworldwide.com/-/media/files/collateral/trends/peak-trading-the-perfect-storm-for-fraudsters-tl-us.pdf5 page 7 www.digitalcommerce360.com/2018/04/24/e-commerce-fraud-rose-nearly-twice-as-fast-as-e-commerce-sales/6 page 9 www.aciworldwide.com/insights/expert-view/2018/september/positive-profiling

REFERENCES