New Fraud Targets: The Impacts of EMV Chip Card Migration Brings New Challenges

Brendan Miller
 
EMV chip card arrival to U.S. shores does not mean fraud is going away.  It will most likely shift to new channels and verticals post EMV implementation.  Past EMV transitions throughout the rest of the world have shown that EMV plays a big role in reducing in-store fraud.  Consequently, fraud flows to other channels such as Card-Not Present (CNP) environments where cards and users are more difficult to authenticate, as well as SMB in-store merchants where hardware and software has not been installed.  In this post we'll look at some of the impacts of EMV chip card migration in the U.S.
 
The U.S. will Most Likely See an Increase in eCommerce Fraud
 The U.K. saw an increase of 62 percent in card-not-present fraud after its implementation of EMV, as criminals shifted their efforts to other channels of least resistance*.  France, Canada and Australia all cite higher than 50% more instances of CNP fraud in the years following EMV implementation.  
  • Prepaid eGifts will become a particularly vulnerable fraud target.  Online gifts  require little information to send and receive, and as a result become a high-value target for fraudsters.  The growing trend of electronic gifting helps satisfy consumer demand for an instant product that is sent to anyone’s inbox around the world in seconds.  While physical gift card shipment usually takes a few hours or few days to process the merchant has time to verify the validity of the receiver.  Most fraud decisions about eGifting have to be made in real-time.  
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Merchants That Accept EMV Chip Cards Reduce Some Payment Risk, But Not All

Brendan Miller
Much has been written about the impacts of the recent U.S. October 1, 2015 Fraud Liability Shift milestone and the migration to chip cards.  Some retailers geared up for the fraud chargeback liability shift long before October 1st by upgrading POS software and hardware systems to accept the new EMV chip cards.  Most U.S. merchants are still sitting on the EMV sidelines and have not made the commitment to upgrade.  
 
When considering EMV acceptance upgrades retailers need to look at their total risk profile when it comes to fraud, security, and PCI Compliance.  The EMV chip card standard was developed as a way to minimize in-store fraud.  After October 1, 2015 card present merchants will be accepting more risk as transactions made with counterfeited EMV cards will now be the merchant's responsibility if it decides not to accept EMV chip technology at the POS.  The benefit of the investment in new payment system upgrades needs to outweigh the risk of fraud and customer perception for the merchant.    
 
Fraud and EMV in the Context of Risk
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Transforming the Role of Payments in the Digital Business

Brendan Miller
My mission at Forrester is to help ebusiness executives transform the role of payments from financial utility into an engine for customer engagement, revenue growth and improved customer experience.
 
A barrage of new innovation and business models are upending how consumers and businesses make and receive payments.  If merchants and businesses do not consider or implement these new innovations they risk losing customers and ultimately relevancy.  
 
Customer obsessed businesses can turn payments disruption into business advantage.  Success hinges on making technological and organizational shifts that turn the view of payments from customer transactions to an engine for customer growth.  
 
Businesses must consider the following challenges if they want to turn payments into customer advantage:
 
  • Embrace mobile and emerging payments
  • Gain more customer relevancy through collected payment data
  • Provide new tailored customer experiences and services based at point of purchase
  • Reduce risk and secure the shopping experience from data compromise and fraud 
  • Leverage payments for operational advantages
My role will be focused on how to make payments more operative and strategic through the lens of “Transforming the Customer Experience,” “Accelerating Your Digital Business,” “Embracing the Mobile Mind shift,” “Turning Data into Customer Insights.”  I look forward to expanding the aperture of these topics and working with you to transform the role of payments in your organization. 

Beyond Language & Payments: Website Localization Must-Haves For Global eCommerce

Lily Varon

Long gone are the days in which eCommerce site localization means just translating language and accepting localized payment methods. In a high stakes environment, where a global roll out of direct localized sites can mean millions of dollars of investment, eBusiness professionals responsible for managing international customer-facing websites must localize effectively or risk damaging the reputation of their brands and stifling growth.

Forrester published a report today that outlines seven mission-critical areas to any website localization initiative. Among these imperatives are:

  • Consistent Domain Structures.  The best practice in a domain name strategy for a multinational company is to maintain a strong global brand by using the same domain strategy across the globe. There are four common URL strategies available to firms today: country code top-level domains or ccTLDs (e.g., acme.br), subfolders (e.g., acme.com/br/portugues), subdomains (e.g., br.acme.com), and brand-level global top-level domains or gTLDs (e.g., annualreport.acme). The report provides detailed considerations for each domain convention.
  • SEO-optimized site content.  It is essential to make sure the website’s translated content is easily discoverable for consumers and is positioned to rank at the top of dominant local search engines. eBusiness leaders must understand search engine market share and local market semantics in order to come up on top.
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How Will You Communicate With Your Customers If They Don't Read Email?

Julie Ask

Your customers are inundated with messages every day from friends or family, work colleagues, and marketers among others. Notifications from their banks, news organizations and fitness bands also land on their mobile phones. Let me show you the home screen of my iPhone.

A summary of my communication (or lack thereof) shows:

  • 24,998 unread personal emails (okay, mostly from marketers)
  • 4,937 unopened work emails
  • 272 unopened SMS messages
  • 45 unopened/read messages on WeChat (these are from marketers)
  • 0 unread notifications from Facebook (and I average 23 per day)
  • 0 unread notifications from Slack (and I average 87 per day)

 

 

I still use all of these communication channels, but I pay more attention to some of the channels than to others.

Here’s what is happening:

  1. My email inbox has been overrun by emails I no longer read or want.
  2. I continue to download new communication applications. Each time I do so, I am very selective about who I add into my new circle.
  3. I pay most attention to those applications that offer value to me in the form of entertainment or as in the case of Slack, collaboration with a very small group of trusted colleagues. These messages are extremely relevant to me – and personal.
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European Cross-Channel Retail Sales Forecast, 2015 To 2020: Measuring The Influence Of Your Digital Assets Offline

Michelle Beeson

Europe's eBusiness professionals are increasingly focused on their digital presence, and with good reason. Digital touchpoints are feeding into almost every stage of the customer life-cycle. For many retailers over half of all online traffic comes from mobile devices, like smartphones - yet, smartphone conversion rates are considerably lower. Initially this may appear as a cause for concern. But Forrester’s updated European Cross-Channel Retail Sales Forecast sheds a different light on this phenomenon by quantifying the influence of digital touchpoints, including mobile, on overall sales, both online and offline.

eBusiness leaders must consider their digital assets as part of the whole customer-lifecycle, rather than simply channel by channel. Digital touchpoints have a significant influence beyond online sales. In fact, by 2020, Forrester forecasts that digital will influence 53% of total retail sales in EU-7, or €947 billion, including a combination of online sales and offline sales influenced by online research.

Key takeaways from the updated cross-channel retail sales forecast published today include:

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The Cross-Border eCommerce Opportunity Unfolds

Zia Daniell Wigder

In last year’s global eCommerce predictions report, we wrote that in 2015, cross-border eCommerce would become "more seamless and less apparent to shoppers". We’ve started to embark on this path: Today consumers around the world have access to growing selection of products as more retailers make their offerings available to shoppers in other countries. My colleague Michelle Beeson recently documented that cross-border sales in Europe alone will reach €40 billion by 2018.

Retailers that haven’t yet started to ship cross-border—and those that have only dipped their toes in the water—now have a variety of different solution providers that can help them take their brands into new markets. Analyst Lily Varon and I just published a report that looks at the trends and leading vendors in this space with a focus on solutions targeted at US-based merchants. It’s now common to see retailers working with different partners including:

International parcel carriers. A number of retailers elect to manage their international shipping options directly with an international carrier such as UPS or FedEx. In some cases, a cross-border option is an extension of the existing relationship between the merchant and the carrier; in others, merchants will seek out a new partner specifically to help with cross-border shipments.

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Millennial Shopping Experience Series: A Stroll Down Fifth Ave: Digital? Yes. Helpful? Not so much.

Patti Freeman Evans

Omnichannel retailing is a ubiquitous initiative among retailers today.  It's ambitious, necessary and very challenging.  Each channel reinforces the others and Adam Silverman's digital store work is great stuff advancing the thinking around how retailers are bringing new digital tech into the store environment, putting into customer and store associate hands to drive value.  He writes about it in a recent doc: The Future of the Digital Store.  And, two millennials on our team tested out some digital store experiences recently.   Here is the second in the millennials shopping experience blog series, this one by Laura Naparstek and Diana Gold.

On a recent afternoon, we took a walk down NYC’s Fifth Avenue to discover that many retailers are not always getting the in-store tech game right. This area of Manhattan is like an upscale mall where retailers experiment and test new in-store innovations; however, the technology we saw did little to reduce friction. Many retailers’ in-store tools were cosmetic—or broken.

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Which Banks Lead In Mobile: Forrester Benchmarks 41 Providers Around The World

Peter Wannemacher

Over the past seven years, mobile banking has gone from little more than an extension of online banking to what one digital banking executive now calls “the most important part of my job.” eBusiness and channel strategy professionals at banks are under intense pressure to differentiate by offering mobile features, content, and experiences that meet — or exceed — customers’ needs and expectations.

To help executives and digital leaders better understand where mobile banking is today — and where different banking providers stand in terms of their mobile offerings — Forrester conducts an annual mobile banking benchmark. This year, we evaluated 41 different banks from more than a dozen different countries across four continents. We recently published the findings in our 2015 Global Mobile Banking Benchmark report.

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How to make your company the most awesome place to work. #EVAR!!!

Martin Gill

We are constantly told that millennials are breaking the workplace rules. They refuse to work 9 to 5. They demand iPhones. They can’t work unless there’s a fridge full of beer and a pool table in the office. And with a growing war for digital talent, many digital leaders are setting their sights firmly on attracting the digital generation to their firms.

But a recent IBM study suggests an even more interesting conclusion. While the study largely agrees with every other conclusion on the desires of the millennial workforce, it also strongly pointed out that it’s not just “youngsters” that want autonomy, flexibility, empowerment, an awesome work environment that ignites their creativity and the feeling that what they do makes a difference.

It's everybody.

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