Credit Card Processing Industry Response to the Increasingly Tech Savvy Customer
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The presentation discusses several payment industry topics: 1) EMV/chip cards that are more secure than magnetic stripe cards and reduce fraud; the checkout experience will change as cards are inserted not swiped. 2) Security and PCI 3.0 standards focusing on improved segmentation, firewalls, encryption and tokenization. 3) Apple Pay and mobile payments that create more trusted transactions using tokenization for security. 4) Growing use of digital deals and offers delivered via social media, text and mobile that will integrate with point of sale over time. 5) These changes represent opportunities for next generation secure processing as the payments industry adapts to the "perfect storm" of new technologies.
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Credit Card Processing Industry Response to the Increasingly Tech Savvy Customer
- 1. The Perfect Storm Sid Singh Senior Vice President and General Manager
- 2. Agenda • EMV / Chip • Security / PCI 3.0 • Apple Pay / Mobility • Digital Deals/ Offers • Implications
- 3. What is a Chip Card ? Software MicroChip Personalization Signature Panel Secret Security Keys Cardholder Data Hologram Brand Marks Magnetic Stripe
- 4. Chip Cards Reduce Fraud • Chip validates card is authentic – Proves to issuer that this card is issued – Avoids counterfeit cards – Very difficult to copy • Chip and PIN number validates cardholder – Proves cardholder is legitimate – Avoids lost, stolen, “not received” fraud • Enhanced risk management – Chip can be updated post issuance – Card can be programmed with spending and usage limits
- 5. The Checkout Experience will change • Cardholder maintains control over card • Card is inserted into terminal, not swiped • Cardholder remembering to obtain card • Chip and magnetic stripe will co-exist for several years
- 6. Why EMV Now • EMV Chip Cards are more expensive and complicated to duplicate • Cardholders keep the card in their possession • Transactions further secured by PIN
- 7. EMV Migration Timelines 2013 2015 2017 April 2013 October 2015 Liability shift begins for Visa, MasterCard, American Express and Discover (Fuel AFD are excluded) October 2017 Liability shift begins for Fuel AFDs
- 8. EMV is not the LAW…But • EMV is a card network mandate, not a law • There are advantages for merchants who support EMV • Currently, issuers incur the cost of card-present counterfeit fraud • Starting Oct 2015, the non-chip party will bear the cost of fraud • Best practice : no need to panic, target upgrade to EMV within calendar 2015
- 9. Agenda • EMV / Chip • Security / PCI 3.0 • Apple Pay / Mobility • Digital Deals/ Offers • Implications
- 10. More Security Focus • PCI 3.0 • Segmentation / Firewalls • Tampering/ Remote Access • Point to Point Encryption • Tokenization
- 11. Creating More Trusted Transactions
- 12. Agenda • EMV / Chip • Security / PCI 3.0 • Apple Pay / Mobility • Digital Deals/ Offers • Implications
- 13. What is Apple Pay
- 14. What is Apple Pay
- 15. Who is supporting Apple Pay
- 16. Security
- 17. Agenda • EMV / Chip • Security / PCI 3.0 • Apple Pay / Mobility • Digital Deals/ Offers • Implications
- 18. Early Couponing
- 19. Today • Social Media, Text, Viral, Mobile • Sweeping & Swift Change • The Millennials • Affects Commerce Source: Boris, Cynthia. “New Report Shows Social Media Leads to Coupon Searches,” Marketing Pilgrim, 5 March 2014.
- 20. Digital Deals and Offers Source: PayPros. “Daily Deals, Offers, Loyalty & Rewards: Technology Opportunities for Software Developers,” 2014.
- 21. Digital Deals and Offers • Digital Deals will Grow & Mature • POS Integration • Consumers Willing to Share Information for Relevant Offers • Push-Based Advertising Will Become Less Common
- 22. Digital Deals and Offers
- 23. Agenda • EMV / Chip • Security / PCI 3.0 • Apple Pay / Mobility • Digital Deals/ Offers • Implications
- 24. The Perfect Storm • New payments paradigm • EMV, PCI and Apple Pay are opportunities • Next gen secure processing • We all need to jointly adapt
- 25. Thank You
Editor's Notes
- Let’s begin at the beginning… In 1888, Asa Candler gave out free paper tickets to sell his new drink, Coca Cola Couponing has been integral to sales and marketing since The basic premise has not changed – although the means of receiving, redeeming and processing has
- Today, as technology and commerce change, society does, as well… - The way we interact and communicate has changed – social media, text, glass, viraility, mobility Arguably, we live in the greatest period of change since industrial revolution We struggle to stay on top of advancements that affect our daily lives We can’t ignore “The Millenials”… - Born between 1980 and 2000 - 76 million of them - First generation predicted NOT to do as well as parents – so deals and offers important - Moving away from paper coupons - Most likely to modify shopping based on loyalty programs - 92% download digital coupons to a loyalty card before heading to the store Speaks to imperative to move forward and develop integrated mobile strategy How Commerce is affected: - In social media, marketers share the same space with our friends and family – competing for your attention - Proximity detection technology sends in-store notifications – deals/discounts (Apple iBeacon – ELABORATE FOR MERCHANT AUDIENCE) - We can buy over the web or via mobile apps – more choices to come - Robust purchasing data – a complete feedback loop (buy, track, extend offer, buy again, extend better offer) – results in very precise targeting
- - Few other marketing techniques can produce such definable and measurable results for merchants and banks - Marry transaction data with consumer purchasing habits – REVOLUTIONARY - Is pushing out inefficiencies in marketing (shotgun approach) Targeting options for merchants: who has or hasn’t bought recently; spent certain amount; geographic; product categories And - merchants can pay for only conversions (pay for performance) PROBLEMS: - Nearly half the businesses polled CANNOT say whether their programs are profitable. A significant issue is that businesses can’t track offers. Historically, POS has not talked to the offers program - Additionally, retailers are balking at the cost, the administration, the inability to target, and the poor POS integration - GOOD NEWS: big data – DRIVEN BY PAYMENTS - is refining the process
- - Space will grow & mature in next few years as companies adapt and add new features Will contend with privacy concerns (merchant access to personal data) – but consumer confidence will increase - Growing in sophistication We’re moving from a From Push to Pull model – consumers are willing to share personal information to get personal, relevant offers (especially Millinnials) No longer will advertisers run blanket ads hoping for some percentage to respond to the ad In fact, retailers will be able to anticipate future purchase, rather than reward past behavior Because, traditionally, POS systems and Digital Deal programs were walled off from one another Soon, they’ll be fully integrated, allowing payments and purchasing to be connected to the tracking and reporting function POS systems will work with Offer programs, allowing tracking – so businesses WILL know if their programs were profitable And that’s extraordinarily powerful!
- These technologies and services will result in new, relevant offers programs for marketing Digital offers solutions Fully Integrated into the POS Portals, allowing merchants to push offers based on business goals (new customers, returning, slow periods) Alignment of payments and marketing for powerful tracking & reporting
- It’s the perfect storm - Exciting and a little scary We interact and communicate differently - EMV, PCI, Security (EXPLAIN) Many challenges & opportunities - The rising technologies will affect your operations, and you will need to adapt