April 10, 2020
TRANSACT  |  Driving Secure Ecommerce  |  etatransact.com

TRANSACT | Driving Secure Ecommerce | etatransact.com


– So, at TRANSACT we know the discussions among networks, and
processors, and FinTechs are all focused on
developing new interfaces, like we talked about right here, and of course, better security. All designed to drive commerce
for consumers and merchants. Now the payments industry, of course, constantly needs new
tools, and new technologies to meet the growing cybersecurity and fraud threats that merchants
face online and in store. We all know that 70
percent of U.S. spending is done electronically by consumers. 478 billion dollars in
E-commerce expected in 2018. We have to meet consumer demands to ensure simplicity, speed, and security across all E-commerce platforms. To talk about this more,
and to, once again, make a little news here at TRANSACT, I’m pleased to welcome Jess Turner. Jess is the Executive Vice President of Digital Payments and Labs for North America at MasterCard. You all know MasterCard last night named the business partner of the year by ETA, so congratulations again to them. (applause) In North America Jess leads strategy, commercialization and product management of digital payments products, and she’s also responsible for
customer digital engagement with key issuers globally. She leads a product development
and engineering team to collaborate with the largest
global issuers worldwide to advanced payments. And she’s here to talk to us about the next generation
of secure E-commerce. Please join me in welcoming Jess Turner. (applause) – Good morning everybody, thanks for being here with me so early, I don’t know about you, but there was no coffee in my hotel room, so this morning the first thing I did was go to the lobby and find
the nearest coffee shop, and put my credit card in the terminal, and buy myself a much
needed cup of caffeine. Then I ran to my room
to get ready to be here with you today, and realized
it was my best friend Camilla’s birthday and I once again failed to send her anything. So I went to my mobile device, and I bought her some flowers. Once I was finished getting ready, I stayed at a different hotel, I had to get here. So I picked my favorite taxi app, called a taxi, and then paid digitally. Many of you here have
had a similar morning. Some of you may have decided
to get a healthy smoothie instead of a cup of
caffeine, so good for you. Others may have hit the slot machines instead of coming directly here. But regardless, your world was
likely physical and digital, all in the same this morning. And the reason for that is
because we as consumers, everyday, are gonna have
physical and digital activities in our lives, where we need a way to pay. Now as a consumer, you
want the same, consistent, secure, ubiquitous way to pay, whether that’s physical, or digital, it really doesn’t matter to you. In the physical world, we
afford consumers that today. Many of you in this
room have enabled that. You walk into a terminal,
you know how to pay, it’s secure, it’s transparent,
and it’s ubiquitous. We’ve done that leveraging
the EMVco standards work of chip and pin, and contactless. This has allowed a ubiquitous
experience globally. Merchants have a single integration to offer their consumers a way to pay for all the networks they
decided they wanna pay with. This is how consumers expect to pay. In the digital world, we
have a little ways to go. Digital transactions continue to grow, last year alone, digital
transactions grew by over 20%. I expect that trend to continue, as I’m sure many of you do. But the user experience
isn’t perfect all the time. Think about yourself the last
time you had to buy something quickly on your mobile device and you had to key enter all
of your credential information on that small screen. And we have some
opportunities in security. For MasterCard, we have
four key principles to our digital strategy. Best in class customer experience
through consumer choice, security, transparency, and privacy. If you think about it, that’s what our brand
stands for around the world. Consumer experience through
consumer choice is critical. We just talked about key entry. It’s not ideal, so as a result, consumers are leaning
towards card on file. MasterCard has enabled the ecosystem, whether that be with merchants, digital partners, third party wallets, to put a best in class user experience in to the hands of consumers
for their digital journey. However, not every merchant
wants to offer card on file. And not every consumer wants
to put their credentials in a merchant environment
or a third party wallet. So as a result, MasterCard
has decided to evolve MasterPass’ checkout mechanism to support the secure
remote commerce standard recently introduced by
EMVco in October of 2017. The secure remote commerce standard, which you’ll often hear
referred to today as SRC, is about an open platform that is platform agnostic, but enables a streamlined,
ubiquitous, consistent experience and a digital journey of a consumer. In addition to that, it’s
about a streamlined integration for merchants, and it’s a
platform for us to scale EMVco tokens in this digital journey, increasing the security
of these transactions. Much like a physical terminal on the merchant’s counter today, we believe that SRC can bring together this experience with one common
consistent check out button. For all complying networks, you can have one common
consistent checkout button, making checkout easier for consumers and easier for merchants to integrate. The coexistence of
competing digital checkouts, whether it be card on file, a third party wallet, or maybe the Secure
Remote Commerce standard is a good thing, it’s a good thing for consumers and merchants
because it enables choice. Another key principle like I
mentioned before of MasterCard is securing every transaction. Securing every transaction is critical to what people expect from
all of us in this room. We started this tokenization journey to meet that need about four years ago. So as a result, the mass
majority of U.S consumer cards can be tokenized today. This makes a token only world in reach. This advancement, whether it
be putting a token in a device, a merchant, a commerce platform, has great advancements for our industry and for the consumer. By using tokens, fraudsters,
if they get the credentials, its rendered useless, there’s
nothing they can do with that. It reduces the risk burden on merchants. For consumers and merchants and all alike, it takes away the dependency of the changes on the physical plastic, whether that be number, expiration date, and making sure the
transaction goes through. And this should increase approval rates. But lastly, but importantly, it’s incredibly important as a industry we think about being
transparent with our consumers. Consumers deserve the right to know where their card
credentials are being stored and how they’re being used. Tokens are the most
efficient way to do this. The most efficient way to do this. So the reason I’m here today, is to talk to everyone as an industry. To say, how do we come together where it makes sense to
tokenize where it makes sense and also to standardize
where it makes sense. MasterCard, you know, the
center, the cornerstone of our strategy is that we are
a partner centric business. We are a B2B to C business. So we believe in standardization
where it makes sense, checkout and security, but we will continue to execute
against our digital roadmap like we have been doing, and we will create, build and distribute differentiated products and services through our customers to
give to their consumers in this digital journey. My belief is many people in this room share many of these
principles and beliefs. Best in class customer experience
through consumer choice, security, transparency, and privacy. So it’s a call into action as an industry, whether you’re a PSP,
a gateway, a merchant, a digital partner, an
acquirer, or an issuer. To come together and support the Secure Remote Commerce standard to get to one common
consistent checkout button for our consumers and also to bring us to a token only world. So with that, I’d like to take the chance to welcome the rest of
the panelists here today, to have them share a little
bit about their thoughts on the same topic. – [Jason] Thanks Jess! – Thank you. (applause) – Okay, so, let’s continue
the conversation, shall we? About digital commerce, I’ll sit here. – Okay. – And I’ll invite you to sit here. – Okay. – And then I will invite
onto the stage to join us for this continuation of our conversation, T.S O’Neil, who’s the Global Head of Payment Processing Products for Visa. Amy Parsons, who’s the
Senior Vice President and Head of Global Acceptance
and Customer Experience at Discover Financial Services, and Garrett Goff who
is the Global Payments and Fraud and Analytics Lead for Netflix. So please join me in welcoming
these three panelists to the stage. (applause) Hi T.S., welcome, Amy, – I think you’re sitting next to me. – Garrett, please. All right, so, it’s a day
of news here at Transact, so thanks Jess for bringing that here and walking us through this, but having heard from the provider side about what this is, let’s hear from the merchant side about what this means. So Garrett from Netflix’s perspective as a E-Commerce merchant that
I think everyone in the room is familiar with, so we
can probably dispense with the biography of the company, if you had to kind of narrow this down to two things, really, just two things as far as online E-Commerce
pain points if you will for merchants and consumers what are the two things that this really addresses and solves? – Yeah I think, a big one for me, is imagine it’s Friday evening, I get home, and there’s a new
season of Stranger Things out. But, my card’s been
replaced, as happens, right. There’s this world in
which plastic replacement still matter to many users, even in markets where there are products like Account Updater. It’s not perfect, and there’s
still challenges we all face. And I think that’s, for us,
one of the biggest challenges in well developed, established markets is consumers having to deal
with their cards being replaced and having to come to a merchant site and swap them out and have failures and lost service, it’s not just for us, it’s for any card on file merchant. So I think that’s something
that’s been quite challenging, and that’s something that
we’ve already observed, card on file tokenization
starting to solve. Outside the U.S, I spent
a few months living in Southeast Asia late last year and started to get a
feel for consumer fear around shopping online
or around paying online or at least, if not fear, maybe some hesitation,
and maybe a lack of trust to a mild degree. I think that’s something that’s going to be really
interesting to see solved over time as we sort of improve general trust and
security in the ecosystem, and that’s again something that tokenization starts to solve. If consumers no longer are concerned around credentials being lost or around inability to control
where their card details go, I think that’s gonna be a
pretty compelling use case for them over the long
run in emerging markets. – [Jason] Terrific, and Amy you’re, in your role at Discover,
you’re what I like to think of as a token evangelist. You talk a lot about tokenization and the importance of moving, particularly in the E-Commerce
environment to tokenization and Jess obviously talked
about how SRC is really focused on moving tokenization
forward for E-Commerce. Can you talk to us a little bit about from Discover’s perspective
how this is gonna help get us to the tokenization world we all wanna be in for E-Commerce? – Yeah, I mean, I think it’s
not only just about tokens, it’s actually about securing
the entire E-commerce environment and all the different channels that are showing up today. And many of you are creating
a lot of those experiences. So when we think about
what we’re trying to do in particular for both the consumer and the merchant side of the business, we’re trying to create a very dynamic, kind of pay load if
you wanna call it that, of payment credentials that’s dynamic and is no longer static
and will constantly refresh and replace itself right at
that moment of transaction. Tokens are a critical component of that, because we can actually
replace them real time, so they show up whenever it
is we need to push them out to whatever place it is
people are transacting, and I think at the end of the day probably the most important
piece to a consumer that tokens bring, and it’s
something that’s hidden from them that they
can’t actually appreciate until their card is lost or stolen is you actually, tokens,
can just automatically go out to the rest of the world wherever you have stored
credentials sitting and replace it with a token. So as a consumer, everything’s always on, will always work, and you
don’t have to take any action whatsoever in order to actually replace what was a stolen card, if we wanna actually talk about plastic. So, I think tokens help bring to life a lot of this real time
dynamic very secure interface with a very high convenience
structure for consumers. – [Jordan] And T.S,
from Visa’s perspective, from the product perspective and, I should’ve noted,
congratulations to you on your new global role in product, I know you’re only two weeks into it, but, and this SRC announcement is, ten minutes old, but
what’s Visa’s perspective on what this brings to Ecommerce and security and convenience and helping address merchant pain points. – Sure so I mean, you know, as a payment industry geek
like all of us in this room, I’m still constantly amazed that you show up in a little country, village in Thailand, and you know that your payment experience is gonna work in a consistent way because somebody took the time over the last several decades
to define exactly what that piece of plastic was gonna look like in the physical world. The dimensions, where the chip goes, where the mag stripe goes
and all of that stuff. And yet when you look at the
digital commerce experience today, there’s inconsistency, there’s, as a consumer and a merchant, you don’t know exactly how
things are getting secured, standards around data payloads
don’t exist today, and so on. So you know, as Visa, we
strongly endorse EMVco’s Secure Remote Commerce Standards, as just talked about a few minutes ago which came out last fall. And these standards are
incredibly important for the industry and
they’re a big breakthrough, because you move from a world where data security standards don’t exist and all of the stuff is
confusing for consumers and expensive for merchants to integrate to a world where the security
standards are prescribed, how data gets captured, transported, stored, gets prescribed. And I think that sets the bedrock for all kinds of innovation
in the world to come. Digital Commerce is evolving as we know, Jess’ story about the physical
and digital interaction, those worlds are blurring. Digital commerce is gonna be
blended with physical commerce, and it’s incredibly important that we have a set of standards that the
whole industry can innovate on. So Visa’s announcing today our digital commerce program which is in a sense, building off of the Secure Remote Commerce Standards, and migrating our Visa checkout platform to those single standards and creating the technology
and the resources for everybody in the ecosystem, merchants, acquirers,
gateways, commerce platforms, to build with us on those standards, and really bring, take the
leap forward into this world of standard secure digital commerce. – Yeah and Jess, T.S. mentioned this, I think this is important to emphasize. What we’re talking about here is really the implementation
of EMVco standards. So can you help us understand
what this means in practice? You know, as a consumer, we all know, we go to Ecommerce sites,
we see, frankly multiple card brand buttons on the
Ecommerce checkout page, and it sounds like we’re
moving to a different world as we implement these EMVco standards. So tell us a little bit about
what we’re now going to see going forward as we implement
these EMVco standards, what that means for what
the consumers gonna see when they go through this
Ecommerce experience. – Sure, so you know, I
tried to bring it to life when I was talking earlier but really what I think
the consumer’s gonna see is what they’re used to
in the physical world. The see one terminal, they use it, they use it regardless
of how they’re paying, that’s really what this is. This is about the consumer
going through a digital journey and seeing one way to
pay that’s consistent, both at recognizing the ways to check out, so that’s where we believe at MasterCard that SRC can help us bring
this experience together with one consistent checkout button, but it’s also about the flow. The digital flow of the consumer, so even after that, what does the, how does the transaction complete in the digital world and
what are those steps? And I think that’s what the
consumer will see globally, which is a consistent experience so that they feel safe and secure in knowing their transaction
is working like it should. – [Jordan] And what,
obviously we’re an audience of acquirers and processors
, and ISOs and VARS and PayFax and ISVs and you know, the entire sales channels to merchants and many in the room have
Ecommerce merchant customers. What’s your message to that channel and what people should
start to be talking about to their Ecommerce merchant customers as SRC is implemented this year. – Sure, I think, you know,
you want me to take that? Okay, so what we should be talking about is this is an extension of
what we’re doing already. Right, so many of you have been helping us support the digital journey in making the user experience better, that’s what we’ve been
doing with MasterPass. What we see is from evolving MasterPass to also support this standard, it’s just an evolution of
what you’re doing today. And that’s the message from a Secure Remote Commerce standard, the other is is to start
to receive and understand how to take dynamic data so you can benefit from tokenization. – [T.S.] Can I just add? – And T.S., yeah, so Visa’s perspective on what you’re telling the channel to talk to Ecommerce merchants about. – Sure, so from our perspective this is an effort to solve
some of the biggest pain points that exist in the ecosystem. So if you’re a merchant, today you’re integrating
with multiple different kinds of platforms, conversion
rates are a challenge. Authentication and authorization
rates are a challenge. What this does is actually
solves those pain points. Makes integration simpler for a merchant, with tokenization and the 3DS, 3D secure part of it being part of the overall standards, you create an environment
where conversion rates, authentication, authorization
rates should all improve. So I think it’s a big breakthrough for us as an industry to move there. – Yeah, Amy? – Yeah I mean it’s definitely
an efficiency play. I think if you look and you start saying well I have to do five things today, you’ll have to do one tomorrow, that’s a huge operational lift, I think for everybody in this room. The technology we’re talking about here is incredibly complex, we talk about it as if it’s this simple, really easy thing, but all of you know how hard it is to build. So if we only have to build one thing, that gives us time to actually use that technology space, work more on the consumer interface, their engagement structure, and really for the merchants, right, being able to work on their interaction around commerce in general. I do wanna just add though, there is still a lot of
work to be done on this. So we talk about it, it is real, it is coming, but the technical framework will be released later today and we are looking for engagement. I think it will take all of us to make sure that this
works truly from end to end, with all the various players it could be anywhere from
three players to ten players that touch a transaction
in sub split seconds and so I think we really
encourage feedback, we look to talk to merchants, to all the different people in this room that play in the different
components in the channel to really make sure that
this is a very high, secure solution that’s very
efficient for everybody. – And before I go to
Garrett with the last word on the merchant perspective here, Amy people are having trouble locating the Discover lounge, can you? – Yeah I was gonna say, just
stand up and turn around. And if you didn’t notice (laughs). – So Netflix perspective last word as we get ready to implement this how this is gonna change the experience for your customers. – Yeah so SRC as a concept
is still quite new to us, we’ve heard about it
extremely recently I’ll say, however a core sort of
back end component of that is the ability to support
card on file tokenization. And that’s something that
we do need to see growth in. In even a market like the U.S., where that is not new to us, we’ve been doing that now for some time directly with the schemes. I think you know anything we can do to help drive that support more greatly even in a market like the U.S. is a great thing and anything
we can do to help support that even as a merchant we will work on with issuers and with the schemes and with other parts of the ecosystem. So I think we would love
to see that grow quickly and again that’s sort of a core component for making, I believe SRC work
over the long run as well. – [Jordan] And have you
finished Lost in Space yet? – Absolutely, it was wonderful. – [Jordan] It’s fantastic. – I love it. – [Jordan] So as a child of the 70s I’m looking forward to the reboot. So thanks for doing that, and the other 200 original
programs that Netflix does to help fill our long plane rides. – [Amy] Our flights, yes. – All right, so very
interesting announcement, Jess thanks for opening us up and walking us through it, T.S., Amy, Garrett, thanks
for helping us understand what SRC means, these EMVco standards that are gonna change
Ecommerce for the better. So please join me in thanking
our terrific panelists. (applause) – Thank you so much. – Thank you. – [Jordan] Thanks.

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