The Green Sheet Online Edition
October 26, 2015 • Issue 15:10:02
Safe, simple, efficient online checkout
PAAY LLC, a New York-based payment startup, launched an e-commerce checkout solution designed to protect merchants from fraudulent chargebacks while helping to lower the associated costs of e-commerce transactions. The company uses Verified by Visa and MasterCard SecureCode, two-factor authentication technologies developed by Visa Inc. and MasterCard Worldwide that can help card-not-present transactions qualify for lower interchange rates.
"We knew that to create a truly compelling product, we had to find a way to help every player in the payments ecosystem," said PAAY co-founder Yitz Mendlowitz. "By integrating with the 3D-Secure program, we have managed to develop a solution that can save money and shape the bottom line of both processors and merchants."
PAAY's e-commerce platform has been certified by major U.S. processors, including First Data Corp., Chase Paymentech Solutions LLC, Moneris Solutions Inc. and Global Payments Inc. The company works with Magento, WooCommerce, OpenCart and Zen Cart e-commerce shopping cart providers. More such integrations are planned.
Two-factor authentication, two-step checkout
The software is offered in two solutions: PAAY mobile wallet and PAAYbility. With PAAY mobile wallet, PAAY's checkout plugin expedites the consumer checkout experience, the company stated. Users type their phone numbers into the plugin at checkout, which pushes transaction details to their smartphone's PAAY app where they validate the transaction by entering a unique PIN. The two-step checkout process eliminates the need to memorize passwords or enter personal information.
PAAY uses the Mobile Safe method to enable consumers to register payment card numbers into their PAAY accounts just once. PAAY will then securely tokenize the card number and delete the original record to reduce the risk of theft. If a smartphone is lost or stolen, PAAY can remotely wipe the device. Since no data is stored locally on a device, consumers bear no risk of having their credit card numbers being stolen; they will just have to create a new PIN and re-enter their credit card details on the replacement device, PAAY stated.
The company emphasized that the mobile wallet's two-factor, online authentication can lower the transaction's interchange rate, mitigate fraud and shift chargeback liability from retailers to payment card issuers. Additionally, merchants never see sensitive cardholder data that is stored and tokenized in the PAAY app.
Merchants receive consumer shipping details, contact information and notification on whether the payment was approved or declined. PAAY communicates sensitive payment information directly to the processors to obtain transaction approvals.
The second solution, PAAYbility, is a stand-alone merchant plug-in devised to lower risk of shopping cart abandonment by keeping the checkout experience exactly the same for the consumer. While the interface looks the same to users, transactions on the backend are authenticated using the 3D-Secure program, enabling them to qualify for lower rates and chargeback protection.
A timely solution for the EMV era
With the mandatory shift to Europay, MasterCard and Visa (EMV) chip card technology, payment analysts have warned that criminals will increasingly target e-commerce retailers. Studies among countries that previously implemented EMV indicate they experienced a dramatic uplift in online fraud. For example, card-not-present fraud increased by 50 percent in Canada and Australia, and 79 percent in the United Kingdom.
Aite Group LLC expects e-commerce fraud to double from $3.3 billion to $6.4 billion in the United States by 2018. This threat and the unprecedented growth in online shopping are prompting many merchants to review online payments strategies.
PAAY technology solutions are available for ISOs and select channel partners to resell to their online merchants. ISOs that register with the company will have access to PAAY's platform, which includes simplified merchant boarding. Additional educational materials and sales tools are also available on PAAY's website.
PAAY stated that users can securely transact on e-commerce websites that display PAAY widgets. Additionally, a list of merchants that accept PAAY will soon be available. The company also plans to make the feature available at local retail stores.
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