Tuesday, March 1, 2016
The consensus among payments experts is that broad EMV (Europay, MasterCard and Visa) adoption in the United States will lead to increased crime associated with e-commerce transactions, and payment enterprises are developing solutions to thwart card-not-present (CNP) fraud. Two such companies – Total System Services Inc. (TSYS), a global acquirer based in Columbus, Ga., and Ethoca Ltd., a technology services company headquartered in Toronto – recently teamed to create a new level of protection for e-commerce transactions.
“With the continued growth of e-commerce payments and the anticipated rise in card-not-present fraud, efficient collaboration between issuing banks and merchants is crucial to help mitigate risk and improve the cardholder experience,” said Andrew Mathieson, Group Executive at TSYS. “The TSYS Transaction Recovery Network enables a collaborative efficiency that reduces online fraud and operational expenses associated with chargebacks.”
The TSYS Transaction Recovery Network, powered by Ethoca, is designed to stop CNP fraud, recover lost revenue and eliminate chargebacks. The platform will enable TSYS to automatically deliver confirmed fraud data from the issuer to Ethoca in near real time. In response, Ethoca will pass confirmed cases of card fraud across a large, global merchant network to recover funds via transaction reversal or refund, negating the need for an issuer to initiate a chargeback procedure. The process will enable issuers and merchants to stop fraud at the source, saving time and costs, the companies stated.
Market Research firm eMarketer estimates e-commerce sales will exceed $3.5 trillion over the next five years. Following are 10 countries the company cited as top e-commerce regions, along with year-over-year growth, according to “Global e-commerce sales set to grow 25% in 2015,” by Matt Linder, published July 29, 2015, by Internet Retailer:
Trevor Clarke, Executive Vice President of Issuer Relations at Ethoca, noted that Aite Group LLC predicts CNP losses will reach $6.4 billion by 2018. The consulting firm attributes the increase to the post-EMV shift in fraud from card present to CNP channels. “With TSYS’ Transaction Recovery Network, collaboration between card issuers and merchants will now be available to TSYS card issuers worldwide,” Clarke said. “Through this initiative, we’re executing on a shared vision: helping card issuers find more efficient and cardholder-friendly ways to combat the costly, damaging effects of fraud and chargebacks.”
Ethoca, established in 2005, has deployed collaboration-based technology to merchants and issuers in five continents using what is said to be the largest collaboration network of its kind. Seven of the top 10 e-commerce brands, seven of the top 10 U.S. card issuers, two of the top five U.K. card issuers and more than 3,500 e-commerce businesses around the world rely on Ethoca solutions, the company reported.
Ethoca stated that its issuer customers have successfully stopped an average of 65 percent of CNP fraud, with an 84 percent stoppage among highly disputed merchants. It additionally noted a 75 percent recovery rate of low-value transactions that would otherwise be written off, and up to 40 percent recovery of 3D Secure transactions.
The TSYS Transaction Recovery Network is available on select platforms for consumer and commercial payment card issuers worldwide. TSYS and Ethoca expect card issuers, e-commerce merchants and online businesses to leverage available and actionable fraud intelligence and card acceptance insights made possible through this unique platform and capability. The companies expect widespread adoption to spur revenue growth and further protect payment security infrastructure.
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