The future of payments and what it means for fraud
By Daniel Greiller, Sales Director, Feedzai, Inc.
The payments landscape is going through some exciting times. It took thousands of years for money to move from coins to paper. Each subsequent new payment method took less time to develop than the last. We had card payments 250 years later, online transaction two decades after that and mobile wallets less than 15 years later. This trend will only continue to accelerate as more ways to pay become available such as biometrics, wearables and others.
A future with technology
The growth is inherent in mobile payments in particular. Marketing blog eMarketer suggested mobile device transactions will go up 210 percent in 2016. One in every five smartphones will make a contactless transaction this year. Since many credit card terminals in the EU already have contactless functionality, it’s an easy shift to mobile wallets such as Apple Pay, Google Wallet and Samsung Pay. Already, Apple Pay has a dominant foothold in the U.K. and will expand across the channel later in 2016. Payment processor PPro noted that this will create significant change in the field of payments throughout the continent.
It’s clear banks and card issuers embrace new payment technology as much as consumers do. MasterCard in particular wants to further develop wearables by working with connected card developer Coin to create the technology necessary for a universal standard of wearable payments, according to PYMNTS. This will help further the concept of the Payments of Things. The Internet of Things is likely to become regular parlance if it hasn’t already. The concept of PoT takes it a step further by making payments interconnected. Soon, people will be able to replace their wallets with a wristband or necklace.
The potential of fraud
The future of payments will make everything interconnected. There are pilots for payments via your car, buttons on your fridge and even by taking a selfie! As new payment channels become available and omnichannel commerce continues to grow, criminals will have a growing number of vectors to attack. Fraud prevention solutions will need greater flexibility to consume larger amounts of data across more variables. As customer expectations grow and as companies fight to fulfill orders faster, fraud prevention systems must operate not in shorter time windows but in real time. Otherwise, it’s like shutting the stable door after the horse has bolted – pointless.
The need for a comprehensive solution
While proper mobile and device security will be necessary to combat fraud, it doesn’t guarantee comprehensive protection. Feedzai research shows that 68 percent of fraud is actually multichannel. The fight against fraud necessitates the deployment of a real-time and truly omnichannel fraud prevention solution that monitors all transactions and consumer activity.
Finally, Feedzai’s complex event processing engine allows truly real-time fraud detection. The platform currently processes more than $1 billion in payments every day, with latencies as low as 3 milliseconds. Feedzai’s machine learning is data agnostic. It easily integrates any data stream to drive decisions across any payment channel. This allows scalability as new data or channels are brought online.
The future is an exciting time for payments. It will also be a challenging period with the rise of new fraud vectors undermining security for consumers and banks. Feedzai is perfectly positioned to grow and support the evolving payment ecosystem in fighting fraud, whichever direction it comes from.
Having worked in banking, payments and fraud prevention for the last 10 years I joined Feedzai because it was the first solution I encountered that had an answer for every question I had – it was truly omni-channel and omni-data. As a Sales Director the most exciting part of my job is listening to the challenges prospective clients face, knowing that if I listen properly and understand their situation in full, I will be able to help them succeed.