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Increase conversion, convenience and security in e-commerce checkouts - Silke Hubert, Netcetera


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Tokenization and Secure Remote Commerce as key technologies

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Increase conversion, convenience and security in e-commerce checkouts - Silke Hubert, Netcetera

  1. 1. Silke Hubert Pre-Sales Consultant Digital Payments Increase conversion, convenience and security in e-commerce checkouts Tokenization and Secure Remote Commerce as key technologies
  2. 2. Trends and challenges in e-commerce Structural shift in-store to e-commerce Increasing level of concentration at large merchants & platforms Regulatory requirements such as PSD2 have strong impact Mobile growth m-commerce & in-app payments Instant and effortless user experience Higher risk/fraud CNP compared to CP Lost transactional revenues abandonments & declines Higher costs for CNP versus CP Low conversion rates especially on mobile channels Inconsistent & inconvenient user experience TRENDS CHALLENGES
  3. 3. 61% of checkouts are card based and therefore face abandonments, declines and fraud Cards 61% Direct transfer 28% Other 11% 29%Cards-on-File 19%Guest Checkout 13% Digital Wallets eCommerce Checkout Types (Europe) Source: Mastercard, Worldpay,BCG Abandonment & decline rate when 3DS (1.0) is used24% Decline rate when 3DS is not used17% Times higher fraud rate of CNP compared to CP4-10 Customers abandon cart due to long /complicated checkout1in4 E-commerce checkouts
  4. 4. Central use case of tokenization: digitize a card Card Issuer Substituting a sensitive data element (PAN) with a non-sensitive equivalent Step-up authentication* T Token Requestor Token Service Provider (Scheme) *e.g. 3DS NPA (Non Payment Authentication) can be used as step up for card digitization
  5. 5. … already demonstrated by many token requestors Token Requestor Token Service Provider (Scheme) Card Issuer OEM Pays/ Wallets Merchants& PSP IoT IssuerPays/ Wallets NEW
  6. 6. Tokenization in e-commerce is using the same principles as for mobile contactless payment PSP Acquirer network T AuthenticationDetokenization PAN Entry CoF Card IssuerToken Requestor Token Service Provider (Scheme)
  7. 7. main use cases of e-com tokenization4 ENROLL Add card manually or tokenize from Card-on-File DISPLAY CARDS Card metadata (e.g. card art) coming from token service TRANSACT Generate EMV cryptogram for transactions LIFECYCLE Issuer account update, update of PAN / token status
  8. 8. Benefits of scheme tokenization Helps to increase security, approval rates and conversion PAN replacement Reduces risk & PCI scope of Token versus PAN Token/cryptogramassigned to merchant Results in better risk scores at issuers and drives increased approval rates On-top «features» PSD2 SCA compliant: basis for Delegated Authentication & Push Provisioning EMV cryptogram Protects against fraud from relay and replay Lifecycle management Keeps credentials up to date, avoids abandonments & provides a more seamless user experience Card art Builds familiarity & can drive conversion +
  9. 9. First results ~ 6% increase in approval rates communicated by two schemes Approval rate tokens vs. PAN at benchmarked samples Approval rates vary by country, merchant and issuer *Scheme 1: sample of over 50,000 transactions across participating online merchants during 2019, compared to overall ecommerce transactions during the same period 2018. *Scheme 2: Authorization rate lift from decline codes within a sample of 17 merchants. 4 - 9% increased approval rate in randomized comparison between token to PAN-based authorizations at a global PSP (Sept. 2019) PAN TOKEN ~ 6% Increase T
  10. 10. Netcetera‘s ToPay eCom Token Connector One interface to connect to multiple schemes with unified flows
  11. 11. EMV® Secure Remote Commerce: Key points of EMV SRC framework Future standard to make card based e-commerce checkouts more seamless and secure Pay securely via single, consistent SRC checkout button Scheme neutral (EMVCo) successor of Masterpass & Visa Checkout to help interoperability
  12. 12. What it looks like: See it live in the US SRC button
  13. 13. What it looks like: See it live in the US First time enrollment Identified user
  14. 14. What it looks like: See it live in the US Automatic device & user recognition
  15. 15. Benefits of SRC Consistent and seamless checkout experience SRC works the same for all schemes No tedious card data entry: enrolled and returning consumer and device are recognized Enhanced security and reduced complexity Every card is digitized: dynamic data improve security Consistent, simplified integration Integration options for EMV 3DS & scheme tokenization
  16. 16. Cards-on-File 29% Replace PAN by token to reduce risk Use EMV cryptogram to improve security Use lifecycle information • to keep credentials up to date • to avoid abandonments • to provide a more seamless UX Cards in guest checkout 19% Same as above plus Improve usability for customer Cards 61% Direct transfer 28% Other 11% e-commerce checkout types (Europe) How scheme tokenization & SRC help increase conversion, convenience and security T
  17. 17. Silke Hubert Pre-Sales Consultant Digital Payments Visit us at booth P12 Thank you