Financial Transactions: making sure you are secure

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2 Financial Transactions: making sure you are secure Erdovan Ates Payment System Integrity MasterCard Europe Jason Hancock Global Business Development enett International

3 Card Fraud an industry perspective

4 Market noise around card data compromise and induced fraud risk Database Hacking Skimming at ATMs New Technologies claimed to be weak PayPass (RFIDs..) Fraud Metrics University of Cambridge claim that Chip & PIN is broken 4

5 Millions Card Fraud the numbers Card Not Present is the main fraud type acquired in Europe (67% of total) and continues to increase MasterCard Total Europe Acquirer Fraud Volume (by fraud type) % of Total Europe Acquirer Fraud (Q1& Data, Europe as Acquirer) CNP L&S 13% CFT L&S OTHER CNP 67% CNF 15% Source: MasterCard SAFE Data 5

6 Polling Question

7 Which country within Europe has the highest incidence of acquired e-commerce fraud on credit cards? 1) Germany 2) UK 3) Italy 9% 43% 48%

8 A dual approach MasterCard s product offering recognizes the need for a dual approach, combining structural industry solutions with efficient fraud detection and prevention tools Priority 1 Priority 2 EMV and SecureCode Implementing industry solutions already help banks to dramatically reduce their level of fraud. Fraud Management Tools Specific fraud detection and prevention tools help banks manage the remaining part of their fraud until the entire world is EMV/3D Secure Fraud Management Solutions help to further reduce the fraud that slips through the net of EMV and Securecode 8

9 A dual approach MasterCard s product offering recognizes the need for a dual approach, combining structural industry solutions with efficient fraud detection and prevention tools E-commerce Fraud blocked thanks to Securecode Fraud blocked thanks to EMV Counterfeit MOTO Lost & Stolen Other Total Fraud Remaining fraud to manage Remaining fraud to manage Protect card data until it does not need to be protected anymore 9

10 Solutions to reduce fraud Solutions proposed by MasterCard to reduce fraud across the transaction life cycle, above and beyond industry solutions Global Standards Support Financial Product Rules Additional Products & Services EMVCO 3D-Secure PCI DSS Labs Warrington Customer Security & Risk Services Academy Risk Management 1 2 Inter-Change 2 1 Account Data Compromise Recovery Plan Inter-Regional Liability Shift EMV Mandate Geo-Blocking Maestro Chip-Only EMS Suite E-Com Merchant Fraud Management Fraud Control Virtual Account No. Advisors Operational Prevention Detection Recovery 1 Structural prevention EMV, SecureCode, PayPass, PCI DSS 2 Manage transition period

11 Travel Agencies & Tour Operators Card Not Present (CNP) Fraud

12 Polling Question

13 What percentage of Travel Agent and Tour Operator Card Fraud was Mail Order / Telephone Order as opposed to e-commerce? 1) 50% 2) 35% 3) 30% 22% 29% 49%

14 MasterCard CNP fraud acquired at travel agencies and tour operators CNP Fraud Acquired at European Travel Agencies and Tour Operators MOTO 30% E-COM 70% CNP fraud is mainly e-commerce E-com fraud decreased in value whilst MOTO increased Source: MasterCard SAFE Data, Q1&

15 Supplier Payment Security Virtual Account Numbers (VANs)

16 Highly secure card payments It s all about control Supplier NATs Online fraud Organisational misuse Protection from supplier default 16

17 Virtual Account Numbers (VANs) Single-use Virtual Account Number generated for each supplier payment Controls can be put in place governing usage 17

18 Key principles of a VAN Typically for a fixed amount Usually in the currency of the purchase Restricted to the merchant category Limited to a defined date range- activation and expiry Requires enhanced data capture / rules validation 18

19 VAN platforms offer further control Individual user profiles Defined access level permissions Card issuing limits Real-time data reporting Transparency on all user activity 19

20 Polling Question

21 Do your current supplier payment methods give you sufficient control? 1) Yes, controls already in place 22% 2) Some controls in place but could be much better 3) No, we need a lot more control 23% 55%

22 Thank you