December 27, 2016Compiled by CardNotPresent.com Staff 2016 was a tough year for predictions—just ask Hillary Clinton or David Cameron. But, even while unpredictability reigned this year, businesses plan based on what they think is going to happen over different time horizons—especially the next 12 months. CardNotPresent.com asked several merchants and service providers in the CNP space to do what political pollsters in 2016 could not: examine the current environment and tell us what is likely to happen in the next year. A focus on false positives, mobile-first design, expansion of machine learning and AI in payments and authentication advances for enhanced security are some of the things on experts’ minds heading into the new year. Hear what else leaders in our space identified as trends to watch, opportunities to leverage or threats to prepare for in 2017.
I expect false-positive reduction to be a big initiative for most fraud teams in 2017. Looking at several studies and benchmark reports, a reduction of false positives represents the biggest area for improvement and savings. There has been so much focus on chargeback reduction, review rates, and cancelled rates that another component of fraud KPIs—false positives—seems to have been left behind. I think this is a result of the complexity around false positives and the amount of work it takes to put together and execute on a plan to actually see some savings. There is a lot of money out there and a way to improve the customer experience with false-positive reduction. It should be the hot topic for 2017 – Kyle Largent, Fraud Prevention Supervisor, New Balance
We will look back at 2016 as the true tipping point where mobile experiences defined your success. We have seen the data that says that mobile e-commerce is set to be the dominant way we all shop and pay. We think merchants will really optimize for mobile first in 2017. That means new form factors, new payment types and true mobile-first design. Bring on the wallets, bring on biometrics and bring on a new set of mobile analytics and fraud tools. Merchants who fail to modernize their fraud prevention, particularly around mobile, will pay the price. – Ralph Dangelmaier, CEO, BlueSnap
A few things occur to me off the top of my head:
- There will still be too many options for mobile-device payments without a clear winner outside of PayPal. Things will remain fragmented as a lot of deals will be made between different providers and big merchants to incentivize adoption.
- Millennials will continue to confuse us on how they like to pay.
- The big payment processors will continue to be weak supporting merchant reporting needs, but begin to improve them as a value add. There will be consolidation among “international payment providers” as some boutique processors drop out or are acquired, while the big guys get better at doing all payment types, everywhere.
- Data breaches will continue to be a big issue. PCI support companies will have their biggest sales year ever. Card networks will enforce more rules against merchants out of compliance than ever before.
My prediction (or wish) for 2017 is that we will continue to evolve the idea of ‘online social profiles’ as means to detect and understand customers’ behaviors and motives. At Remitly, we will focus our efforts on balancing customer expectations of fast, trustworthy and friendly service with the right level of diligence to deter fraudsters and bad actors. We also will continue to focus on detecting abnormal customer behavior while reducing reviews, ultimately leading to an optimal customer experience. – Danielle Hill, Director of Risk Programs, Remitly
Security practices that rely on knowledge-based authentication are rapidly weakening and data breaches are increasing. We predict there will be more than one billion consumer records breached in 2017—finally causing many companies to abandon the password for good. Recent research shows that there is an enormous unmet demand among Millennials for using selfies in mobile commerce. We predict that more than $3 billion in mobile commerce transactions during 2017 will incorporate selfies for authorization or authentication. –Kalle Marsal, CMO, Mitek
Finally, 2017 will be the year EMV frustrations align perfectly with advancements in mobile commerce—leading to new and improved invisible commerce that frustrated people will want to adopt. Mobile commerce advancements mean a frictionless, invisible checkout experience for shoppers. The launch of Amazon Go is just the beginning of this phenomenon and we will see broader adoption of this concept in 2017. With the advent of machine learning, it’s now possible to learn more about shoppers and their intent even before the checkout happens. This will lead to a smart and personalized checkout experience where trusted shoppers are directed to an instant and frictionless checkout experience while fraudulent shoppers would be led down a path of friction (e.g., being required to input CVV, which many legitimate consumers are still put through today). While it may not happen this year, the payment options could be changed dynamically if machine learning predicts the basket size of the customer and offer rewards with the purchase. AI and machine learning should make our lives simpler and easier and this is an implementation well within reach that will improve daily life for shoppers. –Nuno Sebastiao, CEO, Feedzai
Payment demands are becoming increasingly complex across the board, and only payment solutions based on advanced technologies will be able to meet these growing challenges in 2017. Payment platforms that embrace greater automation will definitely be in a good place because they effectively reduce expenses and in-house resources, while increasing payment flow visibility and minimizing inefficiencies. Machine learning enables the use of granular data to create business rules that dynamically govern payment routing, as well as the adjustment of fraud screening levels in real time at different locations. Payment solutions that enable merchants to drill down, monitor and intelligently adjust every component of the payment ecosystem will undoubtedly become major industry players in the coming years. –Oren Levy, CEO, Zooz