The aim of online card payments is to offer consumers the simplest and most convenient user experience while ensuring the highest possible level of security. The particular challenges lie, on the one hand, in the fact that the abuse rates in e-commerce are currently still many times higher than in the physical business at the point of sale (POS). On the other hand, customers abandon purchases for various reasons. In addition, the second European Payment Services Directive (PSD2) has significantly increased the security requirements, among other things through Strong Customer Authentication (SCA).
Advanced solutions thanks to close cooperation with Schemes
Netcetera's mission is to create suitable solutions for card issuers, payment service providers (PSPs) and acquirers - in close cooperation with the major card organizations Mastercard, Visa and American Express. Netcetera is a technical associate of EMVCo's, who are responsible for standardizing the various technologies, and is thus directly involved in important innovations and developments for payment transactions.
Improvements with tokenization, SRC and 3DS 2
The current solutions include tokenization and the new rules for Secure Remote Commerce (SRC). The aim is to make a card transaction in e-commerce as simple, convenient and secure for all parties involved as customers and merchants are used to at the physical POS. All the technology required for this should remain in the background.
In tokenization, a so-called token replaces the card number. Such a token has the advantage that it can be linked to specific devices (e.g. smartphones) and specific applications. If an unauthorized person gets hold of a token, they cannot use it – in contrast to a real card number. Such tokens are used by Apple Pay or Google Pay, among others, and now also in e-commerce. Both, card organizations (schemes) and various PSPs offer tokenization services. Kurt Schmid, Managing Director Digital Payment at Netcetera, comments: "The schemes' tokenization services create a link between merchants and card issuers. Compared to PSP tokenization it offers significant advantages, such as better conversion and improved security. The first practical experiences have already shown good results. We also expect that in the foreseeable future the schemes may make payments without tokens economically less attractive and even prohibit them altogether".
SRC is designed to ensure an even smoother payment process in e-commerce. In the near future, SRC replaces the existing solutions "MasterPass" from Mastercard as well as "Visa Checkout". Returning customers should be automatically recognized and thus be able to save some of the previously necessary steps in the checkout process, which in turn will have a positive effect on conversion.
The further development of 3-D Secure is also currently providing food for discussion. In its latest version 2.1 and 2.2, the system supports the exceptions provided for in the rules for strong customer authentication. This includes rules relating to whitelisting and risk management measures. Kurt Schmid comments: "It makes sense for online merchants to migrate quickly to 3-D Secure 2.x in order to make the most of the exceptions and thus make card payments even easier for their customers".
Exchange of experiences at the MPE
During the event organized together with Visa at Spielfeld in Berlin in February and the presentations of our payment experts at the MPE, we had an intensive exchange with partners and customers on these topics. The desire for more communication and exchange between card organizations, card issuers and the acceptance side (acquirers, PSPs, merchants) became particularly clear, for example to plan timelines more realistically and to enable a better coordination between card issuers and acquirers.
Netcetera stays on the ball and will continue these discussions at Profitcard on 10 and 11 March in Berlin and at Money20/20 from 16 to 18 June in Amsterdam.
To the MPE presentations on SlideShare:
- Ana Vuksanovikj-Vanevska, Senior Product Manager Payment Security: “Boost your approved transaction volume by utilizing EMV 3DS 2.2.0 and PSD2 RTS exemptions”
- Silke Hubert, Presales Consultant Digital Payment: “Increase conversion, convenience and security in e-Commerce Checkouts”