Vol 2. Issue 10 | October 2016
P CM YOUR GATEWAY TO THE WORLD OF PAYMENTS
the rise of emerging markets Driving Payments Innovation
Welcome to Vol.2 - issue 10 Emerging markets might not seem very exciting to some, but others are already taking advantage of the opportunities they have to offer. Mario Shiliashki, CEO @PayU EMEA gives an insight into the regional payments landscape and how it differs from Western Europe & US, why are emerging markets exciting and provides advice for companies contemplating expanding into these regions. Carrying on, Aleksander Kijek, VP of Operations @Nethone, uses the example of Nethone solutions being applied in the gaming industry to explain how friendly fraud can be effectively prevented through the use of Machine Learning, User Profiling and Behavioral Analysis. Shailesh Grover, elaborates on the way of making more money from customers and how to continually acquire more of them. Sarah Clark, General Manager Identity @Mitek, talks about the key to a successful digital transformation and the best ways to leverage the mobile user experience. For our startup Spotlight this month we interviewed Lukasz Dylag, Founder & CEO @VoicePIN, who gave us a better understanding on the use of voice biometrics when it comes to authorization and authentication and how it is becoming an integral part of the identification process. We also have a Special Feature this month. We interviewed, Jordan Lawrence, Co-Founder & CCO @POUR - a newly launched app with the idea of revolutionising marketing. POUR is an app allowing everyday people to make money off their selfies and most importantly work with brands they LOVE! Finally, an overview of the hottest job openings we have at the moment. Feel like you need a change or looking for a job opportunity? Get in touch directly by clicking on the job. What better way to network and get to know your peers in the industry? Check out our premium event partners and make use of the discounts we have on offer before they run out! For any questions, suggestions, or concerns, please address them to the editors: Amir Abdin - amir@paymentsandcardsnetwork.com Duc Dang - duc@paymentsandcardsnetwork.com The Payments & Cards Network team wishes you good reading! Thanks to our partners
002
Contents thoughtleaders
spotlight
4
20 7 15 STORIES 4
Understand to Prevent Aleksander Kijek, VP of Operations @Nethone on using A.I. to
20
Spotlight: Voicepin.com
22
Special Feature: POURapp
24
Hot Jobs
25
Events
get ahead of the game in the fight against friendly fraud.
7 10
Invisible Identity – making the end-to-end experience frictionless Shailesh Grover on providing a great experience by leveraging technology rather than building useless products and then struggling to sell.
The key to a successful digital transformation Sarah Clark, General Manager-Identity @Mitek presents the key to a successful digital transformation by taking the identity verification mobile.
15
Exploring the huge potential of emerging markets Mario Shiliashki, CEO @PayU EMEA shares his experience with us about operating in emerging markets.
Łukasz Dylag, Founder & CEO; “We believe that voice biometrics will become an important element in the process of authorization and authentication”.
We speak to Jordan Lawrence, Co-Founder & CCO @POUR, who gave us a deep insight into the capabilities of POUR and how it is going to revolutionise the marketing industry.
Hand picked jobs of the month within the Payments and FinTech industry. Check out our hottest vacancies for this month and hit APPLY!
Stay up to date with the latest happenings in the industry and make use of our special promo codes!
003
Thought Leaders Corner
Understand to Prevent H ow t o u s e A . I . t o g e t a h e a d o f t h e g a m e i n t h e f i g h t a g a i n s t f r i e n d l y f ra u d . by Aleksander Kijek
F
riendly fraud is one of the most annoying types of fraudulent activities that online merchants have to deal with these days. It is at the same time known as one of the most difficult to fight. It takes place when a legitimate cardholder purchases goods or services and after those are delivered, demands a chargeback. According to some reports, friendly fraud might cost online merchants almost $7 billion this year. It occurs most often in the digital goods segment of ecommerce where traded items/services are almost instantly delivered to a recipient whose true identity is hard to verify. In many cases merchants are unable to prove that they have delivered the ordered good/service to the purchaser at all, or that the purchaser was indeed the person whose card had been used to carry out payment. In the following article I use the example of Nethone solutions being applied in the games industry to explain how friendly fraud can be effectively prevented through the use of advanced Machine Learning, User Profiling and Behaviour Analysis - the three key elements of our approach to the problem.
004
A Why? that leads to Who? First of all, it is crucial to understand why customers commit friendly fraud. They do for various reasons. When it comes to online games, some cardholders demand chargebacks to avoid paying for in-game purchases made by their kids. For some, chargeback is a way to get back the money spent on their own hasty purchases as soon as they realize they did not actually need certain items. For many it is a well-thought-out way to extort money from game publishers and marketplaces while reselling stolen items to other players. They might, of course, have many other motives but those mentioned above are quite common and sufficient to illustrate the phenomenon. There are multiple links between the motive and the features of a friendly fraudster. A kid purchasing some game items using their parent’s smartphone acts very differently from a sly grown-up trying to outsmart the game publisher for profit. By discovering those links, we are able to detect individuals likely to commit friendly fraud even before they make a purchase.
Thought Leaders Corner
? Behaviour Analysis: How do behave those who misbehave? Every individual behaves differently online. People browse marketplaces in many different ways, they interact with the user interface their own way and play games using various tactics and strategies. User’s behaviour can be considered in two basic categories: actions (e.g. the way they type in text, swipe or scroll screen when reading the T&C disclaimer, navigate through the game) and activities (e.g. what items they use in the game, how they use them, if they explore the map or stay in one place, if they interact with other players or constantly stand aside etc.). Nethone’s Behaviour Analysis takes into account both. By gathering information about all the activities and actions performed by players in the game/on the marketplace and around (e.g. reselling items), we create their individual behavioural profiles - a vitally important source of information for further proceedings since this is just the first piece of the puzzle. User Profiling: Thousands of data points to draw conclusions from In the digital realm, individuals consist of persons and devices they use (directly or indirectly) to get online. Since Behaviour Analysis provides information about the former, User Profiling brings in-depth insight into the latter. At Nethone, we gather
information from a multitude of sources to learn as much as possible about the, say, tech side of an individual. We check their operating system, browser, hardware, type of connection, internet service provider and many many more. We x-ray every single player converting the acquired information into 3000 features to get a full picture of who they are from the technical point of view. One might have insurmountable amounts of data at their disposal but it would not help much without a way to analyse and understand it. Here comes the third part of the solution - the crucial one that powers the other two and in fact drives the process: advanced Machine Learning. Machine Learning: The key In-depth Behaviour Analysis as well as thorough User Profiling are possible thanks to advanced Machine Learning. All those actions and activities, software, hardware and connection details must be crunched together and processed to draw accurate conclusions and identify players likely to commit friendly fraud. At Nethone, we create custom Machine Learning models designed to execute particular tasks within the process. We fine tune the models for their optimal performance and constantly monitor their effectiveness. As a result, we are able to predict with great accuracy whether a player is a friendly fraudster or not. Furthermore, the thorough analyses carried out by our models reduce the risk
005
Thought Leaders Corner
of a false positive to minimum. In other words, the solution does not lock sales. To cut a long story short, the combination of advanced Machine Learning, Behaviour Analysis and User Profiling is the name of the game in fighting friendly fraud - not only in the games industry. Friendly fraud is, of course, just one of many kinds of fraud that online merchants, especially digital goods merchants, have to deal with. Happily, fighting friendly fraud is also just one of the many capabilities of Nethone.
Aleksander Kijek VP of Operations
Aleksander Kijek is a Python programmer and Linux enthusiast fascinated by FinTech and Neuroscience. At Nethone, he is responsible for business and product development, coordination of the workflow and assuring comprehensive operational excellence of the company.
Nethone Nethone provides AI-based Anti-fraud and Business Intelligence solutions for ecommerce companies of any size. The company was founded in 2015 by a team of experienced data scientists, risk managers and security specialists with rich merchant background to help online businesses turn threats and challenges into profits. Nethone operates globally, making commerce safe and prosperous.
006
Thought Leaders Corner
Invisible Identity It’s all about making the end-to-end experience frictionless. by Shailesh Grover
H
ow to make more money from customers and how to continually acquire more of them: this seems to be the standard question across most organisations, large and small, that have some product or service to offer. Very few truly focus on how to provide a great experience by leveraging technology rather than building useless products and then struggling to sell. The other extreme is the new billion $$ valuation, what I classify as experience companies - Uber, Airbnb; in my view, these and others like them sell an experience rather than a product as they technically don’t own anything but the frictionless experience. On similar lines, consumer adoption of technology is growing at a much faster rate compared to the readiness of retailers and other service providers to cope with this change. Consumer behaviour and expectations are also changing and they need more speed, transparency, personalised experience - all this on the channel of their choice
and on demand. Surprisingly in 2016, most retailers still cite 9am-5pm on their Twitter, Facebook and contact centres… so they are applying their legacy rules to new tools. The evolution in technology and its adoption lends itself to eliminating friction across most customer use cases. One such aspect that arguably underpins all use cases is (electronic) identity and authentication. Every aspect of our life has an identity of sorts attached to it - medical, employment, business, driving, travel, pension, insurance, mobile, banking, shopping, etc. And each of them, historically, have issued a physical “thing” and then moved to digital “online or mobile”. Some of the more recent providers have a mobilefirst way of doing things but even they ask you to create a means for you to access the service - making you to deal with remembering the various disparate sets of “username” and “password” not to mention remembering the right permutation that goes with each service. Those that have moved to biometrics
have again used traditional ways to get you started first. A few years ago I shared a panel with someone that claimed to have a chip in his right arm that did authentication for a new service. While it sounded very cool, I personally would think twice before doing anything like that! Intrigued with the thought, I did ask a random set of young graduates and interns whether they would be interested - and when I articulated how that chip in their arm would make their life easier, they all responded in the affirmative. Imagine this scenario cutting across multiple industry silos - medicine, medical insurance, wearables, smartphones, payment, transportation, test labs, etc. You are a consumer that is health conscious, wants to have proactive ways to monitor attributes that impact your health, does not want to deal with the complication of various health systems and insurance providers and the ping pong between them, wants to have access to global specialists on-
007
Thought Leaders Corner
demand and don’t want to waste time running to the pharmacy. In short, you want to eliminate the friction to the greatest extent possible from this experience. Let’s start with how this scenario would play out in today’s world. If you need to get a health check you typically go to a doctor who, after checking some basic vital signs, sends you for a blood draw. The blood is then labelled and sent up to a lab and you wait until the results arrive a few days later. Then you schedule a follow-up appointment with your doctor, review the results and in some instances get a prescription for which you then go to the pharmacy. There may be multiple instances where you have to make a payment throughout this process. Now imagine the above with an implantable chip that has the ability to monitor attributes of your blood in real-time and communicate to any smart device - a watch, for example, or a mobile phone - so you can see how you are doing. The smart device can also provide you with an idea of how your stats compare to averages. Overlay machine learning and artificial intelligence can then perform predictive analysis and also suggest preventative care. For a more complex diagnosis, your real-time data is also made available to a specialist of your choice anywhere across the globe: they then write you a prescription which gets delivered to your door in 2 hours via a drone. It sounds like science fiction, but it’s not: there is technology available that can make it happen. This is just one example illustrates how you can leverage technology and integrate cross industry capabilities to deliver an amazing experience!
008
For all of the above to work there is, of course, a need to protect identity, ensure security, and have the right controls in place to proactively identify and curb fraud. All the other necessary attributes (i.e. payment, address, age, gender, past history, passport, loyalty, memberships) are then securely coupled to this identity. Identity and how one secures it is extremely key; it can be done either using primitive methods, although they carry a high risk of fraud, or the currently popular biometric capabilities - or something more future proof like Behavioural Biometrics. •
Identity for the world’s largest democracy: Over a billion people have been issued a biometric card that has your finger print and retina in addition to other identity attributes such as your mobile and address. Not only has India achieved the seemingly impossible task of issuing it to over a billion citizens, this biometric card (called the Adhaar card) unlocks everything one needs - bank account,
mortgage, pension, employment, taxes, medical insurance, you name it. The list goes on. •
European Union eIDAS: Over half of the EU countries issue electronic identity of sort that unlocks everything you need - similar to the Indian biometric card, the difference being that India has a physical card where these countries have it electronically. This unlocks the potential to enable not just cross industry but cross country use cases.
•
UK’s GOV.UK Verify: This is the new way to prove who you are online. It gives a safer, simpler and faster access to government services like filing your taxes or checking the information on your driving license.
Having covered physical biometric identity and electronic identity, let’s now explore how behavioural biometrics can be a game changer. Behavioural biometrics on mobile devices will
Thought Leaders Corner start to become a more important modality because this can provide continuous authentication while a person is naturally using their device. By analysing how a person implicitly uses their device, it is now possible to recognise users. The technology can also be combined with other biometric modalities and authentication factors to create an authentication risk scoring that has the ability to reduce fraud. Its ability to integrate into fraud and risk management solutions makes it an ideal technology for cross industry use cases. A few months ago, I met the CEO of a Canadian startup, Zighra, and was excited to learn about how he and his team are building some of this capability. They call their solution “KineticID” - it combines the power of artificial intelligence and behavioural
analytics to detect account takeover fraud and automated attacks in mobile transactions. I found it very simple in its execution, as it plugs into mobile applications and implicitly recognises the device based on its unique sensorial fingerprints, the user based on their habits and interaction patterns, and ties it to the user action such as account registration, login, and payments. By actively evaluating the user’s unique kinetic signature - including the way the user holds their device, the angle in which they hold it, the touch screen pressure, and acceleration while performing an action - it provides continuous authentication and threat detection. With technology moving at such a pace, timing is perfect to kill the product centric thinking and move to design thinking to focus on delivering that
compelling end-to- end experience. Not only is there a great opportunity to focus on doing that within every industry, given the capability of smart devices, it will soon be expected when customers are going through experiences that cut across multiple industries. So how will identity, insurance and driver’s licenses manifest themselves when the self driving cars become mainstream; when home appliances are smart enough to place orders and make payments; when implantable chips make the driver’s license and the passport obsolete? Are you ready to embrace these changes and more?
Shailesh Grover Shailesh Grover is a thought leader and practitioner of innovation executing ideas into business growth and customer outcomes. He is a strong believer that the fastest way to increase top line growth and lower operating costs is by leveraging technology innovation to provide a compelling customer experience rather than just creating products that don’t match customer needs. He has over 25 years of global experience working across multiple industries in blue chip companies and also startup’s in the Silicon Valley. He is a results-driven, collaborative senior executive and seasoned transformation agent leading and influencing positive disruption to deliver value to traditional and hyper-connected customers.
http://linkedin.com/in/sgrover http://twitter.com/sgr0ver shailesh.grover@gmail.com
In his recent experience at Barclays Bank PLC, he led the innovation agenda across the global entity in addition to embedding a culture of Design Thinking, Agile, Lean, and Six Sigma. He was the Managing Director heading up Research and Development to drive “Horizon 3” thinking across the business, build innovative customer centric propositions and ensure future relevance. Prior to banking, Shailesh was in Telecom in the USA and was responsible for organizational transformation of AT&T wireless and Cingular Wireless. During his tenure the companies experienced the fastest cultural transformation. He did 3 startup’s in San Francisco, one of which went public - He served as the head of IT and Architecture of NextCard which disrupted the online credit card experience. He started his career in 1992 working for NIIT in New Delhi India. Shailesh has a various award wining first-of-their-kind innovative solutions that he has designed and implemented over the years. He is an active speaker and mentors various startups, fintech hub residents and government entities.
009
Thought Leaders Corner
Taking identity verification mobile, the key to a successful digital transformation by Sarah Clark Spoilt for choice and used to the immediacy of a mobile world, consumers nowadays have set the bar high for their banks: they want to be able to manage their finances on the go, to do their banking from anywhere, at any time; they want it all and they want it now. In the meantime, although financial institutions understand their customers’ appetite for simple, effective and realtime banking and are eager to deliver products and services that answer these needs, at a time when data breaches are on the news almost every week, the pressure nothing but mounts for them to comply with the ever stringent AntiMoney Laundering regulations. As banks seek to adapt to the evolving regulatory environment and growing competition from industry disruptors, coming up with a solution to the convenience – security conundrum has become paramount to those financial
010
institutions wanting to win over the digital-only, mobile-centric consumer. There is no argument about the steady growth of mobile banking adoption. A recent study by Javelin Strategy & Research shows that in 2015, the annual percentage of customers using mobile banking services outpaced the annual percentage of bank branch visits by 6%. The report also highlights that the convenience of having access to information and other services just when you need it via mobile phones is one of the main drivers of the mobile banking growth. In parallel, this ‘always connected’ attitude is generating higher expectations on the services provided by other industries such as financial services. Decades working with thousands of financial institutions from around the world have taught us that the answer to this dilemma resides in offering a simple,
Leveraging mobile to build trust wor thy (a n d v a l u a b l e) relationships with customers Trust is the foundation on which the banking industry is built but, since the financial crisis erupted in 2008, this trust has been put into question, forcing banks to work harder than ever to retain their customers. With trust for the banking industry being at all-time low, banks will need to demonstrate a commitment to providing high-quality service to a growing base of mobile banking users. Truth is that, like in most service-oriented industries, a bad mobile banking experience can lead to customers looking for alternative solutions. According to a new FICO survey, that’s exactly what’s happening with a substantial number of millennial banking customers. In fact, the survey found that this demographic
Thought Leaders Corner is two to three times more likely to close all accounts with their primary bank than people in any other age group. Taking into account that younger millennials also noted that having a negative fraud-related experience was another reason that encouraged them to switch banks, implementing a seamless and secure mobile banking experience acquires a double significance: on one hand it is crucial to not incur hefty penalties associated with failure to comply with AML and KYC regulations; on the other, delivering an outstanding experience is the most cost-effective way to avoid increased marketing and operational costs required to retain and win new customers. Knowing your customer is arguably one of the staples of this trust-based ecosystem and electronic identity verification is critical given the focus on
digital transformation and in particular the strategic importance of digital channels for customer acquisition. Electronic identity verification is critical to optimize digital channels for acquisition At Mitek we see how often the biggest obstacle, or at least the perceived as the biggest obstacle, to implementing a new digital on-boarding strategy that can be effective for all applicants to stay in the digital and mobile channel is how to create a reliable and compliant identity verification process. Nowadays it is critical to know the person on the other end of the mobile device; to be certain that your customers are who they say they are. Mobile capture and instant verification of identity documents surges as a key solution in this context – it can move
significant onboarding traffic away from cumbersome, time-consuming, and costly in-branch interactions while increasing the number of good customers who come through the digital or mobile channels. Our experience in the market shows that the mobile capture and identity verification combo is a powerful one as it can increase net new customers who may not otherwise be able to complete the account opening process on a mobile device and who are no longer willing to come in to a branch nor to fax in or mail their personal identity documents. As the complexity of the regulatory landscape has increased, opportunities to leverage technology in order to ease the compliance process and increase transparency in the relationship with both end users and regulators have
Ex. Sales Manager Payments, Business Development Manager
SIGN UP NOW!
JOIN OUR JOB BOARD & SHAPE THE FUTURE OF PAYMENTS Please contact: amir@paymentsandcardsnetwork.com or visit www.payment.jobs Payments & Cards Network | Herengracht 576 | 1017 CJ | Amsterdam | The Netherlands | +31 203 030 257
Thought Leaders Corner
Sarah Clark General Manager-identity Sarah Clark is the General ManagerIdentity at Mitek, a global leader in mobile capture and identity verif ication sof t ware. Before joining Mitek, Sarah successfully managed the product strategy and business development for startups in the payments, e-commerce and technology markets. Sarah holds a BS in Mathematics from Duke University and further developed her managerial skills at Harvard Business School. arisen. Technological solutions such as our mobile ID verification software help firms to meet AML and KYC in an automated way and reduce operational risks. In the same vein, as regulations become more complex and expand their scope, increased use of technology for compliance is expected. For example, the European Union 4.1 Anti-Money Laundry Directive recognizes that electronic means of identity verification are as valid as those traditional ways of verifying the identity of your customer (in-person verification). Similarly, the UK Financial Conduc t Authorit y acknowledges the advantages of electronic identity validation for cross-border transactions
012
and record-keeping, proving that regulators are conscious that too much regulation could hinder innovation and are therefore taking a more strategic view when developing new regulations.
people keep on the move, being capable of checking the identity of your prospective customers regardless their country of origin will translate into more safe and effortless acquisitions.
A seamless mobile user experience and secure ID verification are not mutually exclusive
Leveraging the power of mobile capture for ID verification, Mitek sits right at the intersection of convenience and security: our mobile ID authentication technology enables consumers to easily and instantly validate their identity by simply snapping a picture of their government-issued proof of identity with their smartphone’s camera. No matter how the image comes through, nor its quality, using a combination of advanced image capture software and facial recognition technology, Mitek first verifies the authenticity of a document, and then evaluates the information in the document and applies it for data validation, assuring in real time that the ID presented in a mobile transaction is a genuine, unaltered, and governmentissued ID.
A seamless mobile user experience and more secure identity verification are not mutually exclusive; they are solved in tandem by Mobile Verify which offers instant Identity document authenticity verification with a quick and easy scan using the camera on the mobile device. Most efficient fintech solutions today are simple but surprisingly powerful. Transparent, lean, and user-friendly, they communicate the delivered value in an easy to consume way for the general audience. Achieving a frictionless customer journey that solves today’s tech savvy customer’s demands for immediacy and resolution ranks high among retail banks’ strategic goals. At a time when the leading financial institutions are leaning on user experience to attract and retain their mobile-centric users, rethinking what a bank is and what it means to digitalfirst and mobile-only customers, is paramount to tap on high value cus tomers such as Millennials, expats, international students or the underbanked. Actually, in a global economy where
In other words, we are able to authenticate that the IDs presented for identity verification at enrolling time are unaltered, official governmentissued documents. All without leaving the mobile channel and in a matter of minutes, therefore satisfying at once the institution’s need for a cost-effective and compliant way of verifying the identity of prospects at onboarding time and the end user’s high expectations for speed, convenience and security.
Thought Leaders Corner With such figures supporting the increased relevance of mobile, banks capable of allowing their future clients to open an account from their mobile device will instantly gain an edge over other industry players.
Recent market research reveals that around 25 percent less financial institutions will exist by 2020 as banks look to minimize the impact of increased competition with new players emerging. In such a competitive framework, how you do differentiate and where to innovate becomes of capital importance. For example, identity verification technology enables banks to get those prospects who cannot be approved by traditional means of identity validation out of their pended queue. These can be foreign workers, international students or young professionals that don´t have a solid credit record as yet but still make good future clients. Furthermore, integrating identity verification via mobile devices does not just enable banks and financial institutions to enjoy increased approval rates and tap on new
niches, but also provides more choice to consumers, improved cardholder loyalty and stronger fraud protection for all stakeholders. Deepened engagement and loyalty as a result of outstanding customer experience Deepening engagement and loyalty is just possible if financial institutions deliver banking solutions that go above and beyond the regular service to match their prospects’ lifestyle and banking needs. A recent survey by Bank of America reveals that nearly two in three (62 percent) respondents use mobile or online as their preferred method of banking, which is significantly up from 51 percent in 2015.
Despite the challenges posed by the migration from traditional services to digital banking, data gathered in the recent Digital Engagement Intensity Study conducted by Fiserv and Bank of the West prove that this is a fruitful transition: monthly revenue per customer increased by 10.7 percent after enrollment in digital banking, compared to a 4.5 percent increase for non-digital users during the same period. Likewise, the report points out that higher engagement drove higher value. Among highly engaged customers – defined in the study as those who have the longest tenure, make the most transactions and generate the highest revenue -, average monthly revenue jumped 13.1 percent after digital enrollment.
Mitek Mitek (NASDAQ: MITK) is a global leader in mobile capture and identity verification software solutions. Mitek’s ID document verification allows an enterprise to verify a user’s identity during a mobile transaction, enabling financial institutions, payments companies and other businesses operating in highly regulated markets to transact business safely while increasing revenue from the mobile channel.
013
ABOUT THE MRC
With the vision of making commerce safe and profitable everywhere, the MRC is the leading trade association for eCommerce fraud and payments professionals. The MRC is more than just a trade association; we are a community of industry experts from the most prominent merchants, solution providers, issuers and law enforcement agencies.
PERKS OF MEMBERSHIP Access to a comprehensive resource library of educational presentations, webinars, white papers,
Discounted registration fees at conferences globally
case studies, benchmarking reports & surveys Weekly SmartBrief eNewsletter, which highlights the latest industry news
Access to member-only sessions & events MRC Communities, an interactive forum to discuss
Member directory
industry trends, share information & network with other members #proudlyacommunity
Membership is company based; there is no limit to the number of individuals that can participate
CONFERENCES AT THE FOREFRONT OF
OVERALL SPONSOR
MARCH 13 - 16 ARIA RESORT, LAS VEGAS
OVERALL SPONSOR
ANNUAL CONFERENCES
MEMBER ONLY PLATINUM MEETINGS
Each spring the MRC hosts events in both the US and
MRC Platinum Meetings take place each fall in both Europe
Europe, facilitating unparalleled education, networking
and the US. These events are designed specifically to
opportunities and merchant collaboration to solve
facilitate intimate conversations and information sharing
business challenges and improve processes. Annual
among MRC members.
conferences also include the biggest and brightest exhibitors in one place, providing you with the latest solutions to help your business function efficiently.
expert interview
T
exploring the huge potential of emerging markets
he dynamic nature of the emerging markets opens up new opportunities for innovation and growth. This is particularly true for the payments industry. At the same time, businesses entering these markets are facing many challenges on unknown territory. The PCM team invited Mario Shiliashki, PayU CEO EMEA (Europe, Middle East and Africa), to share his experience with us about operating in emerging markets. We spoke about what to pay close attention to, even before venturing into EMEA high growth markets. As the head of EMEA, can you give us some insight into the regional payment landscape and how it differs from Western Europe or the US? In EMEA, PayU is a leading payments service provider. We are #1 in online payments in countries like Poland, Turkey, Romania, and South Africa. We are a fast growing player in Russia and the main partner for select merchants in Czech Republic and Hungary. While having quite an ambitious expansion plan for the EMEA region, we continue to grow our product and service range beyond just the eCommerce space. Looking at the markets across the EMEA region, they are distinctly different from each other. A few of them are very different from Western standards. In Western Europe, people generally prefer to pay online with credit cards and occasionally with debit cards. Whereas, in, say, Poland, people have the habit
of paying differently. They pay directly via bank transfer. PayU, being the leading innovator in the payments space, was the first to launch the pay-by-link method in Poland. It’s a streamlined bank transfer checkout process to pay for a good or service online by simply sending money to the merchant directly from the consumers’ bank account. As we continue to innovate in that space, PayU spearheaded a one-click checkout by paying with your bank account rather than the credit card. Our data shows us that around 70 per cent of all online payments are done in this way in Poland, whereas only a small portion is via credit card. This is very different from the paying habits of many Western Europeans. Another example is Turkey, where the majority of payments (over 70%) are made with instalment loans. That means payments are made via credit card but are paid off in instalments instead of in one total sum at the end of the month. It’s instead paid 3, 6 or even 12 months after the date of purchase. These are some of the very interesting nuances in payments that PayU is focused on. PayU’s strength also stems from its very local expertise. We are connected to local providers such as the banks, instalment providers, the credit providers and all the local merchants and consumers. This is why we can provide the best experience for merchants and consumers alike on a local level compared to the other multinational players. They often claim to
015
expert interview act locally but really only provide a credit card solution to most of these markets. And if credit card is not the dominant choice of payment in that particular market then those merchants and consumers are left with a negative consumer experience. This constitutes one more reason why PayU is focused on truly local expertise, which is where our strength lies. Another trend to keep an eye on is using mobile for payments in commerce. People in emerging markets commonly use the internet via their mobile devices for the first time. In markets, such as Sub-Saharan Africa, mobile payment is the dominant way to pay and to shop. For merchants that want to expand to Africa, mobile must become the top priority. For PayU, the number 1 priority is making sure to service our customers both on the merchant and consumer side in the best possible way through their mobile device. That means PayU must stay at the forefront of technological development in order to provide an easy to use experience. Equally important to us is the conversion rate. One of our recent studies showed that out of any of other payment service provider, we have the highest conversion rate in the industry. This is a crucial aspect for merchants as they don’t want to lose customers in the payment process Interestingly in Western markets you see a big conversion difference between eCommerce and mobile commerce. So, for people shopping on a PC, the conversion rate is 2 to 3 times higher than people shopping on their mobile device. In the emergent market the difference is not that significant, which is mainly caused due to consumers using their mobile device as their only access to the internet. Since this trend is likely to continue, mobile will be a big battleground in the future. Even beyond payment s, PayU ’s customers and merchants require additional ser vices. This includes easy access to consumer credit or working capital financing, especially for small businesses. Those demands pose opportunities for us, which is why we are starting to explore expansion into these areas where we can provide our customers with an even richer range of services. Why should a global company be excited about entering markets such as Poland and Turkey? First of all, trends show that more and more consumers are going online to shop. These markets have vast populations – these are big markets with a lot of people. Plus, the consumer population tends to be in a younger bracket. For example, in Turkey 70% of the population is below the age of 35. As all of these people going online results in an increasing push for internet penetration both from the governmental side as well as from the consumers themselves. Consequently, when those potential shoppers go online, the global merchants have a great opportunity to capture a substantial part of their online spending. This is because many
016
This Month’s Expert Mario Shiliashki
Chief Executive Officer, PayU EMEA Mario Shiliashki was appointed CEO of PayU EMEA in October 2015. Before joining PayU, Mario was Senior Vice President and Group Head of Global Emerging Payments at MasterCard. Prior to MasterCard he was one of the first employees of Paypal’s international team in London helping building Paypal’s European business. In his early career, Mario was an equity analyst at Goldman Sachs and subsequently a strategy consultant at Bain. He holds an MBA from Harvard Business School and a Bachelor of Science degree in Finance and Economics from Bryant University.
of those global brands are well recognized. This is the market in which consumers are looking to participate. The growth of the market, the even faster growth of e-Commerce and the increasing number of e-Commerce shoppers in these markets all lead to a massive opportunity for global brands to expand beyond single digit growth rates in their domestic markets to potential double or sometimes triple digit growth in areas such as Turkey, Poland, Russia, Central & Eastern Europe. Africa alone represents a whole new world of opportunities that is opening up with a fast growing middle class and internet penetration becoming relatively high. Also governments in that regions are becoming more open and friendly towards import and export business. To us, all these trends spell a big opportunity for global merchants. For that reason, PayU strives to make the move for merchants seamless and easy with our checkout mechanisms paired with our local know-how. We can provide the data and insights into what local consumers need, their preferred way of paying, their preferred way of checkout, what channels they like to shop on and so forth. we already possess this information because we are processing a large part of the online payments in these markets. What do you see as the most important factors for global merchants to be aware of when entering your markets? First and foremost, before entering an emerging market, merchants need to decide how to do it. Among other aspects the right consumer base needs to be determined and the right experience that the merchants want to offer to their consumers must be chosen. At this exact point of entering a new market or expanding within a new market, PayU can help with our data by extracting required information about consumer preferences. Therefore, PayU can advise merchants on suitable payment
expert interview pages, mobile payment services or preferred payment methods. On top of that, merchants need to find the right local partners who can help them build the desired experience and reach targeted local consumers.
markets both on the consumer side and the local acquirers, banks and local merchants side. That’s why we can help global merchants to increase their conversion by making the payment experience as seamless as possible for the consumers.
Another very essential point refers to regulatory requirements. Regulators have particular ways they operate their own markets. The requirements each merchant needs to adhere to differs from market to market. A good example is Russia and Turkey, where data privacy is very critical. In those countries the regulators require that all data stays within their nation’s physical borders. That means severs and data rooms have to be on soil in those countries. as a local player this is a hurdle we have already overcome but for merchants entering the market this might pose a problem linked to extra costs they need to bear to localize their service. So they need to be very well aware of that! PayU can provide a lot of insights to merchants regarding local nuances. Similarly, in markets like Nigeria, Argentina or Brazil there are specific monetary rules in place in terms of how much money a business can take out of the country and how it can be taken out.
In addition to that, PayU organizes certain programs, seminars and events that bring merchants and other industry players together. For example, we have been running the PayU Lab in Poland for three years now. In this event, we bring participants from e-Commerce, m-Commerce and the payments ecosystem together. This creates a space for merchants, regulators, banks, and credit providers to exchange ideas and solutions, facilitating a smooth collaboration in the future. It’s an industrywide initiative we put together and we have similar projects in other markets. Lastly, I can say that we’ve been operating in this emerging market for many years. In many markets we have gathered expertise for over 10 years and we’re very well positioned to drive e-Commerce and help global merchants expand into local markets.
Lastly, merchants need to recognize that the world is becoming a smaller place and they need to have a global presence. In my opinion entering certain growth markets will no longer be a choice but a necessity in a few years. This is due to the increasingly competitive environment in those markets. If global merchants do not plan to enter markets with the highest growth or the highest potential to grow, then their competitors will. As a result they are likely to lose market share. How does PayU fit in to the market? How can PayU help big brands grow significantly in revenue compared to other payment service providers? PayU is as a global brand, with local expertise. Thus, PayU can provide global merchants with consumer habits, consumer preferences, and the best payment methods in each market. We can advise on regulatory and compliance aspects in high growth markets. We are also a well recognized brand in these
Any last bits of advise for a company contemplating expanding into this exciting region? Well, you should look at PayU to be your partner of choice! But seriously, looking ahead you also need to think about what’s next. For PayU that means we are looking beyond the payments services we currently provide. We want to serve the consumers with additional ways in which they can get access to money. In many of our markets, the consumers are not served well by their current providers in terms of access to credit. That is one of the areas where we aim to expand our product offering through partnerships in credit space. The same goes for local small businesses: since we process a lot of their online payments, we can give advise on how to expand their business and even provide them with working capital financing. There are some areas beyond the payments journey we are entering such as ladditonal FinTech services, where we can complement our current offer.
PayU PayU is a leading online payment service in 16 high growth markets across Africa and the Middle East, Central and Eastern Europe, India and Latin America. Our 250+ payment options enable safe transactions for more than 160,000 merchants, allowing them to focus on reaching the 2.3 billion consumers in our markets. For more information please visit www.payu.com
017
With almost 180,000 people in over 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.5 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on RightshoreŽ, its worldwide delivery model. More information is available at www.be.capgemini.com RightshoreŽ is a trademark belonging to Capgemini.
Spotlight You think you have what it takes to start a business in a super-hot market? PCM takes a close look at some of the most innovative and promising startup companies in the payment industry.
startup spotlight
“YOUR VOICE IS THE MOST NATURAL AND CONVINIENT WAY FOR USER AUTHENTICATION.” Łukasz Dyląg, Founder & CEO , VoicePIN.com
Ł
ukasz Dyląg has background in Electronics and Telecommunications and graduated from the AGH University of Science and Technology in Cracow. As an expert in the field of telecommunications, he was involved in many projects for IVR and Contact Center implementations in some of the biggest European companies throughout his career. In 2011, he founded the innovative company VoicePIN.com, which is a voice biometrics producer. What is the idea behind VoicePIN.com and how did your startup come to live? The company was founded five years ago and two years ago it has undergone a change of image rebranding. Moving on the market of new technology, you need to be ready for dynamic changes, respond flexibly to the needs and suggestions of customers. At first we were a typical software company, which was focused on the sales, implementation and integration of our first product - the Virtual Agent Dronn. At this time our engineers and professionals were refining complex technology, voice biometrics, and make it easily scalable, global and universal. This process took about three years. Since that time we commercialized sale of voice biometrics system, we focused on that and in due time we entered with the product on the market – and now we are in the forefront of global voice biometrics producers..
020
Could you please tell us more about the technology and explain “Voice Biometrics”? Voice biometrics is a technology used to identify individuals by analysis of the voice. Biometric identification of the voice is very similar to the identification of people by fingerprints the voice of every person is unique and has unique biometric features. It is increasingly being used during the verification of the identity of people in the customer service office, authorize bank transactions and more. Biometrics is a relatively new technology, setting the current direction of development of
startup Spotlight secure access to personal data. PIN or password does not provide the same degree of safety as the identification based on unique sound of voice, fingerprint or iris drawing. Voice biometrics is currently the only technology that enables common, but safe and simple access to sensitive data (accounts, bank account payments, etc.). In contrast to other commonly used methods of authentication, based on the access passwords, PIN numbers, tokens, one-time SMS, voice biometrics is safer and more user-friendly. What makes your product unique? How is it different than any other provider on the market? We are still a small company, so we are quite flexible. we can create a dedicated solution, customized for the customer. We have also multichannel solutions, which means that voice biometrics can be used in each channel of customer service (mobile applications, call center, website etc.). In addition, we do not use the ASR and we have offers available in SaaS model. How secure are Voice Biometrics, realistically? How do you ensure that fraud does not take place by using this technology? None biometrics can provide 100% safety, it’s about finding the the golden mean. We are able to achieve the efficacy of 98-99 percent, on the probability of hacking into someone’s account less than one per million. Is there any technology that is safe one hundred percent? However, voice biometrics is very good at detecting attempts of fraud and provides a much greater level of security compared to other traditional methods.
VoicePIN is originally a Polish company. What are the advantages and disadvantages of starting a business in one of the emerging markets? The international economy encourages a wider distribution of goods between continents. The main motivation for companies doing business in emerging markets is the opportunity for first-mover advantages. A successful first mover can build local partnerships and have predominance over competitors that enter at a later stage. When your small business expands into an emerging market, you have the opportunity to become part of an economic system that is still being formed. Companies in emerging economies must expand capacity and capability. Voice biometrics operates independently of the language, so any user in the world can log into the system and use it. Therefore, we focus on the development of our global business and the company is building a chain of partners on all continents. This year, we opened an office in Silicon Valley in the US, where we work with mentors on a new business model, in SaaS. What markets / industries do you service at the moment and will you be looking to expand your operations soon to any others? We believe that voice biometrics will become an important element in the process of authorization and authentication, for users, as well as for companies that use it in their customer service channels. Biometric technologies are becoming an integral part of the identification process in the financial sector, other industries will follow their example. Voice biometrics can be used to quickly log in, authorize transactions, reset password, detect emotions, personalize in intelligent systems, like IoT. Currently, we operate in the financial sector, insurance, telecommunications, in fact every large company that has a customer service channels. In the SaaS model, voice biometrics can be plugged into any mobile application. Only innovation can change reality, protect us
021
SPECIAL FEATURE
Pour App Origins: An Interview with Jordan
P
our is an app launched by a team working from San Francisco and Amsterdam. Pour allows users to get rewards for taking selfies with favorite brands in 3 easy steps. Users choose available campaigns on the app’s list or check them on the map, take selfie at sponsored location and then the brand logo is placed to the photo automatically. Once the the selfie is shared on Facebook, Instagram or Twitter, the user receives cash. With their technology, Pour delivers transformative marketing solutions to brands, hotel and restaurant chains, and companies from other industries looking to deliver extremely engaging new customer experiences. Integrating Pour logo placing and a publishing solution in applications can help invigorate a customer base, accelerate them towards loyalty, and expand a fanbase through social media. All this helps drive new revenue streams. PCM: How did your idea for the company originate? Jordan: Well, I was traveling and staying on a small island, Isla Coronero and I spoke with the owner of a beautiful hotel there named Ilya Evans. People were taking photos outside his hotel because of the beautiful scenery and he said “I wish there was some way that everyone who took a photo could place my hotel’s logo on it first before sharing”. And I thought, well let’s make that. It’s a great idea. At first we explored using loyalty points, but we thought about and it and why not pay people money? Cash over coupons is working really well. There’s a psychological connection between receiving cash that’s more powerful than free things or points. PCM: What is your mission and vision? Jordan: Well we think it would be great if we become a source of income for everyday people, especially those traveling the world on a budget. Here’s the way we see it: everyone can be an influencer. Normal people can focus on a brand they love and they do have influence. When you’re sharing and you’re an average person, that’s who is also spending money. Not an “influencer” who spends all day creating these curated artificial images for content. We want to change the influencer market — and make it so that anyone can do this. PCM: What is your product/service that makes you different that others in the space? Jordan: We want to create benefits for advertising for everyday people. Anyone can spread the use of this app, and in that way it’s innovative. The product we have is giving people this option to make cash for their images they’ve created. With our app, the user becomes the content creator for the advertisement
022
and this makes it more attractive to their friends. Using Pour is also a way of bypassing traditional advertising that is being ignored because of technologies like ad blocker Eventually, we are looking to create a Pour wallet. Travelers could use it, share it and set it up at no cost. They could take money directly from the app and place it in their wallet account, pay each other with it, etc. PCM: What kind of year do you foresee for the company? Jordan: We started in January and have worked on our backend development to create a product that is now usable and on the market. We have a few clients and are growing. In the next year, I see this wallet developing. We have a team that includes members with significant payment knowledge so we’re excited to continue growing from here. PCM: What are the key hurdles for growing your business in the coming years? Jordan: Well, competition of course. And we need to keep this appealing and make sure the people we design it for continue to use it and enjoy it.
SPECIAL FEATURE PCM: Any exciting news you would like to share with our network? Jordan: Yes, actually. We are about to sign with a very large hotel chain that is based in Asia and has a growing presence in the EU. This means working with two markets. Our app creates economic empowerment for our users, especially those in an emerging market where this cash will go far. Plus, for our partners this is an amazing way to run a campaign. Think about it: you get to feel out an emerging market with potential buyers, find out how your product is going to do and set up a successful campaign, all at a low cost. Additionally, when a brand is giving out cash payments to users in their target demographic then it increases brand loyalty. Many who participated in the campaign are likely to continue using that brand or looking to purchase it afterwards because of the emotional connection created between the brand and the user as the user creates content and collaborates with the brand. One more great thing we can do with Pour is develop connections with partners and charities. In terms of philanthropy, this would empower people to contribute. Say there is a natural disaster. Partners or everyday people can create a physical site where cash payment is available in the area once a photo is taken. This means people near where the disaster happened can find a way to finance themselves in a time of hardship and the message about raising awareness will be spread via social media, which can lead to more funding. Partners could also have the option to donate or match user donations. This creates a really positive relationship between brands, consumers and users of the app, all working towards a common philanthropic goal.
023
jobs
Hot Jobs Selected Jobs from our Partners
SALES DIRECTOR
CARD SCHEME RELATIONSHIP
MARKETING
PAYMENTS
MANAGER
Paris | France
London | United Kingdom
COMMUNICATION MANAGER
PAYMENT MANAGER / FRAUD
HEAD OF PAYMENTS &
PRICING OPTIMIZATION
TEAM LEADER
FRAUD PREVENTION
ANALYST
Malta
France
Amsterdam | The Netherlands
Amsterdam | The Netherlands
PAYMENT DATA ANALYST
HEAD OF FX
SALES ADVISOR
Malta
Amsterdam | The Netherlands
North Rhine-Westphalia | Germany
These are the latest job opportunities we have on offer! For more information please visit www.paymentsandcardsnetwork.com or check out our international Job Board at www.payment.jobs
024
events
Events Barcelona, Spain Mobey Day is the annual flagship event by Mobey Forum that brings together decision makers from the financial services and fintech industries. The event empowers banks and other financial institutions to lead the future of digital services. Mobey Day connects industry thought leaders to identify and understand commercial drivers for a better customer experience. Mobey Day is a two-day event filled with opportunities to make strategic business contacts and to hear eyeopening views from industry leaders.
5-6
Chicago, USA
5-7
The 2016 BAI Global Banking Innovation Awards has inspired thousands of nominations from financial services organizations from across the world, becoming a catalyst for innovation within the financial services industry. Participation in the awards offers innovators, like you, an opportunity to showcase the originality, impact and success of these innovations.
Atlanta, USA MRC Atlanta offers the world’s leading fraud, risk and payments professionals a space to facilitate critical conversation, information sharing and learning. As a merchant focused, member exclusive event, MRC Atlanta 2016 will provide attendees with the most relevant tools, resources, education and networks to strengthen your skills and enrich your knowledge in this ever evolving and competitive industry.
10-12
DĂźsseldorf, Germany
12-13
With a comprehensive range of offers in congress, interactive formats, and trade fair, NEOCOM has positioned itself as the leading event for Interactive Retail in Germany and Europe with more than 5000 visitors, 220 exhibitors and roundabout 1200 high-level personalities. Meet at the congress more than 1200 decision makers coming from eCommerce, multichannel and retail business and join the different interactive formats, panel discussions as well as various strategy panels.
025
events
Singapore
20 % Discount Code: MPDGPS20
Global Payment Summit is a strategic & pragmatic – for & by senior professionals – platform. GPS covers key trends in the payments and the transaction space. By exchanging the key trends, best practices and workable solutions, we deep-dive into topics and innovations affecting the business directions for the future. Special in-country features by local strategists provide in-depth insights. A true learning curve and networking with leading practitioners in the field.
25 % Discount Code: PCN
18
London, UK
Banking Horizon unites key banking decision makers and consumer finance innovators to share ideas and celebrate the year’s leading customer-focused propositions. Join the inaugural Banking Horizon autumn conference in London to network with the leading innovative thinkers in retail banking and consumer finance. Learn about the pace of change in retail banking and all the elements of end-to-end product design.
Santa Clara, USA
20 % Discount Code: PCNDEVr20
FinDEVr (findevr.com) is the only conference series focused exclusively on the TECHNOLOGY of fintech and the developers, CTOs and other creators of this technology. It showcases the latest tools, technologies, APIs, platforms, case studies and tutorials that developers, software architects, designers, IT executives, and other technologists will use to create the next wave of fintech innovations.
250$ Promo Code: PAYME250
23 -26
026
12-13
Las Vegas, USA
Money20/20 is the largest global event enabling payments and financial services innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology. Drawing 10,000+ attendees, including more than 1,000 CEOs, from over 3,000 companies and 75 countries, Money20/20 is critical to realizing the vision of disruptive ways in which consumers and businesses manage, spend and borrow money.
18-19
events
Cairo, Egypt North Africa Future Banking Forum 2016, rotating around the central theme of “Innovation for 21st century banking�, aims to address the latest innovations, trends and challenges for this emerging market. Through expert presentations, real- life case studies and interactive panel discussions, the forum will focus on payments, mobile banking, internet banking, security and many more trending topics for the industry.
24-25
New York, USA
25-26
New Generation Operational Risk, Americas will feature over 20 senior operational risk professionals who will be reviewing operational risks and regulatory expectations for adding value and using to make informed decisions. Over the two days you and your colleagues can gain valuable insight from the OCC and Federal Reserve Bank of New York.
New York, USA Hosted by the Center for Financial Professionals, Cyber Risk Across Financial Institutions will feature interactive discussions and presentations assessing cyber risk best-practices across financial institutions for better understanding, management and compliance. Hear from 20+ senior risk professionals from leading financial institutions including; Lazard, AIG, BNY Mellon, State Street, Deutsche Bank, Bank of the West and more.
25-26
027
Payments & Cards Network Driving Innovation through knowledge Get involved now!
We value your feedback and ideas! If you’d like to discuss a specific topic, don’t hesitate to contact us. Get in touch today and maybe you will be featured in the next edition: Amsterdam Office Herengracht 576 1017 CJ Amsterdam The Netherlands Email: info@ paymentsandcardsnetwork.com Tel: +31 20 3030 257 Fax: +31 20 8208 295
Follow us now and stay up-to-date with the latest happenings in the payments world!