PayPal Study Finds Mitigating Online Fraud Tough - How an EVC? Card Makes it Simple
PayPal, the leading digital wallet app, found that online fraud is still a significant problem, despite all the digital fraud solutions available. The study is based on businesses, with an average loss of around $3.7 million per year, due to fraudulent transactions. The increasing sophistication of fraudsters and a lack of appropriate technology were cited as major obstacles in mitigating online fraud
Businesses are trying to re-gain consumer trust by taking steps to ensure stringent security safeguards are in place, to protect customer data and transactions - however, it's not working.
We're all familiar with the Pareto principle, also known as the 80/20 rule. Well, it turns out this principle also applies to user adoption. Businesses need to strike a balance, otherwise they might end up unintentionally blocking 80% of their consumers
The EVC? All-in-One, is an innovative EMV micromodule with built-in screen to display a random, dynamic security code that replaces the static CVx2, which is used during the life of the payment card. Designed for eCommerce, the EVC? extends strong EMV security protocol, to online transactions, protecting all stakeholders in the payment ecosystem
Why is this important?
Per PCI DSS compliance, the CVx2 security code (the 3-digit or 4-digit code printed on payment cards used to validate Card Not Present transactions) is the one piece of information that is never stored but must be re-calculated during every transaction. If the security code is constantly updated during an EMV transaction, it increases the security from a card-level source and use during online transactions
How does an EVC? Card make mitigating online fraud simple?
Frictionless user adoption & Issuer implementation, and Use of Supply Chain industry standards
1. Why do consumers favor an EVC? Card over digital-only fraud solutions?
Ease of Use
The focus is on making things easier for consumers, whether they're shopping online or in-person. The goal is to use the knowledge and familiarity that users already have, without making them download any new apps, registering or capturing sensitive biometric data, constantly updating app/user profile, or learn new steps to process a transaction
According to TD Bank's?Douglas Mearkle, (SVP, Head of US Merchant Services), there are two reasons for this trend
“First and foremost is speed,” says Mearkle. “With tap to pay, consumers can quickly take out their credit card and tap the terminal”
The process with a digital wallet is more convoluted by comparison
Users have to unlock phone, then locate and access Mobile app, then go thru additional steps to allow mobile device to communicate with terminal to process the payment
Perception and Value
Consumers love their payment cards as it's an extension of their personality. Consumers are willing to pay more for a perceived greater value and/or better customer experience.
"Today’s consumers are increasingly looking for products and services that are compatible with their values and lifestyle...they are also willing to?pay a premium for products that resonate with (it)" ~ Jesper Domarg?rd (VP Marketing, IDEMIA)
Strong, efficient, EMV security protocols at your fingertips, not at the cost of it
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2. What benefits does an EVC? Card solution provide to Issuers?
Improve Brand Awareness
A physical payment card is the last piece of real estate that connects an Issuer to its consumer. When cards are integrated into a digital wallet such as Apple Pay, PayPal, etc, from the consumer’s mindset, it’s no longer your card program that's completing the transaction, but the latest fintech app, payment trend, etc used at check-out, which chips away at the brand’s identity
Lower Cost of Acquisition, Reduce Churn Rate, and Top of Wallet
According to recent studies, it can cost businesses upwards of $500 to acquire a new account, which often takes several years for the return on investment to break even. However, the EVC? AIO is a revolutionary payment card solution, providing a unique product offering that appeals directly to account holders and can generate a new revenue stream for Issuers. A recent study conducted with over 2,000 respondents from different demographics across the US, found that consumers are willing to pay a monthly opt-in subscription to have an EVC? Card. This means the ROI for an EVC? Card is significantly high, and can reach break-even within months of issuance
Customer attrition is a never-ending battle, but the competition for existing customers has reached a level of intensity never seen before. Two ways to fight customer attrition is to focus on minimizing the account holder churn indicators by Improving Product Appeal and Increasing Engagement
EVC? AIO Card is the only payment product account holders will want to use as it brings immediate benefits to all stakeholders. Seeing the EVC? security code update and knowing the more usage increases the card protection, Cardholders are more likely to keep their accounts open to have access to the frictionless EVC? payment fraud solution.
Ease of Implementation
The EVC? solution is based on EMV rails, so no additional software/server/hardware is required for registration and implementation. No changes or adoption needed in the payment ecosystem for Acquirers, Merchants, and Network/Schemes. Furthermore, Issuers most likely can continue using their preferred card manufacturer for dual-interface cards
Addresses 100% of Client Portfolio
When a new account is opened, users are issued a physical debit card and can opt-in for a credit card. Though mobile apps are gaining traction, usage still accounts for 10-20% of portfolio, while payment cards are use-accessible to 100% of entire client portfolio
More Eco-Friendly and Sustainable Option
Unlike other similar advance electronic card products, the EVC? Card is a battery-free EMV solution that does not require additional hardware, servers, or proprietary software for registration and use. The solution can be issued using standard mailing envelopes, without the need for custom packaging for bulky devices
When payment cards get compromised, they need to be replaced (new chip, new card body, new perso, new fulfillment, new packaging, additional resources/costs, etc). With the EVC? solution, cardholders can generate a new dynamic security code by simply making an EMV transaction, ATM withdrawal, or refresh EVC? code through a mobile app, so no replacement is needed
The EVC? solution extends the card life, making it a more eco-friendly, sustainable and frictionless option; reducing costs, resources needed, lost opportunities, and overall carbon footprint
3. Why do Card Manufactures/Vendors favor an EVC? Card solution?
Use of Industry Standards and Reduce Yield Loss Costs
Designed as a single drop-in replacement for any card body construction (PVC, Metal, recycled plastic), EVC? AIO leverages existing infrastructure, industry standard equipment & procedures, and offers a practical solution around the chip shortage. The EVC? All-in-One modules are delivered in standard 35mm reels, the same format used today by all card manufacturers. It's chip and card manufacturer agnostic, with modules supplied through SPS for inductive coupling or Linxens for a direct connect antenna version
Since the EVC? module is embedded at the very last step in card manufacturing, it reduces the potential yield loss cost to only the card body, unlike other technologies that require inlays/prelam to be laminated early on during manufacturing. If the card body with embedded technology is scrapped, the cost can be substantially high, sometimes 10-20x the cost of a card itself
EVC? All-in-One EMV Micromodule: Simple. Elegant. Frictionless.
To learn more about the frictionless EVC? All-in-One eCommerce Fraud Solution, please visit us at?www.ellipse.la?or contact us at?[email protected]