Chase Paymentech Eyes Holistic Approach, Mobile
By CardNotPresent.com Staff
While fraud, chargeback and reversal rates are important measures, implementing an anti-fraud solution for CNP merchants requires an enterprise-wide perspective, according to Casey Bullock, vice president and general manager of fraud solutions for Chase Paymentech. Bullock, on the job with Chase for about two years now, says the company’s international scope and broad client base puts the company in excellent position to fight fraud now and gives it the wherewithal to spot and leverage important industry trends such as the coming wave of consolidation and the explosion in mobile commerce as both consumers and merchants become increasingly comfortable with the technology.
To find the right anti-fraud solution, Bullock explains it’s important to have a holistic view of the client.
“It starts with defining what you’re ultimate risk exposure is,” he says. “Most of the merchants I work with tend to think about fraud in absolutes: What is my chargeback rate? What is my reversal rate? There is a more effective way to view a merchant’s fraud landscape.”
Bullock says a truly effective fraud prevention program must look at a company’s entire order management lifecycle. What markets are they selling to? Rejection rates might be in line, but are they rejecting the wrong orders and hurting conversion rates? Is a high refund rate keeping fraud rates artificially low? And, is a company devoting too much human capital to fraud prevention? Do they have a legacy solution that requires constant IT involvement to maintain? Is the current fraud prevention process in place nimble and can it adapt quickly to changing fraud trends?
“Since we have to address the largest merchants down to the smallest, we needed to come up with a comprehensive fraud prevention system and support model that could be customized for the most complex or the most simplified merchant environment,” Bullock explains. “In the case of companies that have built their culture around a home-grown system, my role is not to tell them to rip out the heart of their fraud system and replace it. Let’s look at things more holistically. Let’s look at a hybrid approach that combines the best of what the merchant’s current system has to offer with the enhanced analytics and detection capabilities of Chase Paymentech’s real-time fraud prevention system.”
Bullock says Chase can add features like device fingerprinting, proxy piercing or collective merchant analysis. Things, he says, “that will greatly enhance your view of the transaction world that can still be used within the confines of a system the merchant designed. Do I think we could do a more efficient job with the models we built? Yeah I do, but if it isn’t practical to do that, let’s work together to drive the same results using a hybrid approach.”
Navigating Consolidation and the Mobile Revolution
When looking at trends in fraud prevention, Bullock sees two main issues any company operating in the space must negotiate: consolidation and the coming explosion in m-commerce and the fraud that will attend it.
“We’re seeing consolidation in the fraud space,” he notes. “You’re seeing a lot more of the aggregated view: payment companies or large processing institutions like Chase Paymentech working strategically to offer more value added services to their clients than they might have offered in the past.”
Merchants, Bullock says, are in tune with many players consolidating into fewer larger ones because they are increasingly looking for single-vendor relationships and at getting more value out of those relationships. Maintaining multiple vendor relationships and/or integration points can be taxing on both the IT infrastructure of a company as well as vendor management.
“Merchants, as a whole, want a single integration point. They want access to multiple, global payment methods, risk management, tokenization and the vendor expertise tied to this approach,” he explains. “They want to avoid farming out their requirements to multiple API sets, different vendors, different contacts and different price points. That can get challenging and is difficult to maintain.”
As for mobile commerce, Bullock acknowledges the obvious reality that it’s becoming a much more important part of transaction processing. He says Chase Paymentech can provide mobile anti-fraud services tied to the Safetech fraud prevention toolset and more enhancements are currently in development.
“You look at the core components of the fraud capabilities we have and the idea of multi-merchant order linking. It’s based on a collective view of merchant transaction data, velocity trigger, behavior-based variables and subtle linkage points that may only be found by viewing multiple merchant transaction histories in real-time,” he says. “We can identify if a transaction is from a computer, iPad, BlackBerry or anything in between. We can ID where it was in the world as well as sift through the minutia looking for scripted botnet attacks, enslaved devices or different types of proxies that might be included.”
The future of mobile anti-fraud solutions looks a bit different, though. Bullock says the next iteration will include embedding the same detection capabilities Chase Paymentech currently offers in customized mobile apps.
“Most vendors today are not very good at embedding things like device fingerprinting or proxy piercing in a home-grown mobile app a company creates on its own. It’s generally a browser based technology. This is the next frontier for us, and we are working quickly to deploy new payment and fraud prevention technologies in the mobile space. But this year we’ll be able to apply those features piercing to any mobile channel, whether its browser based, or merchant driven with their own customized application.”
Adapting for the Future
Bullock says adaptability is the key to Chase Paymentech’s success.
“Our organization places a high degree of value on understanding what works and what doesn’t for our customers and prospects with a focus directed at making sure we are adapting to the changing trends of the global payment and risk landscape as a whole,” he says. “We didn’t design our fraud solutions with the idea that a merchant would do all their business with us. I think we’ve done a good job over the past couple of years changing the notion that to be a merchant’s trusted advisor in the payment and risk space the vendor needs to be all things to all merchants.”