PCM Volume 2 - Issue 4: The Invisible War Against Cybercrime

P CM YOUR GATEWAY TO THE WORLD OF PAYMENTS

Vol 2. Issue 4 April 2016

THE INVISIBLE WAR AGAINST CYBERCRIME

Welcome to Vol.2 - issue 4 We are very excited to announce the release of the fourth Issue in 2016 of the Payments & Cards Newtwork eMagazine. The main topics in this issue revolve around the development stage of blockchain technology and the risks these new technologies pose toward users. In light of this we feature Pavel Metveev, introducing us to Wirex - an exciting startup company with great ambitions to make blockchain technology benefit everyone. Moreover, he points out vital aspects that may determine a succesful future for Bitcoin.

We feature fraud expert Shaya Posner who has provided us with a comprehensive overview about payments fraud and fraud management best practices. Carrying on from this, we feature Simon Barker, CEO at Conferma, who presents a commercial payment solution which can revolutionize corporate payments and is already very successfully deployed across the business travel sector.

For our Expert Interview this month we spoke with Vanita Pandey, VP Product Marketing at ThreatMetrix, in which she discusses the current state of cybercrime from the perspective of individual consumers and businesses.

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? Don’t hesitate and apply now. 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!

What is more, as a business, the magazine offers you various advertising possibilities.

Want to learn more?

For any questions, suggestions, or concerns, please address them to the editors: Amir Abdin - Duc Dang - Joanna Bak -

amir@paymentsandcardsnetwork.com duc@paymentsandcardsnetwork.com joanna@paymentsandcardsnetwork.com

The Payments & Cards Network team wishes you good reading!

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Contents thoughtleaders

spotlight

16 4 8 10 STORIES 4

Bitcoin - On Its Way to Success

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Payment Fraud - What It Is And How To Manage It

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How one FinTech Innovation could change the way you manage and control corporate expenses forever

Pavel Metveev explains the current stage of bitcoin adoption and where its future lies.

Shaya Posner clarifies payments fraud and provides us with very helpful advice on its management.

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Spotlight: Wirex

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Hot Jobs

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Events

This time we talk to a hot startup aiming to combine cryptocurrency and traditional currency in everyone’s daily finances.

Looking for a new role and exciting challenges in 2016?

Here we showcase the most exciting upcoming events

Simon Barker shines light on a commercial payment solution revolutionizing corperate payments.

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Expert Interview: Cybercrime Vanita Pandey dives with us into the current situation of cybercrime & the impact it has on the commerce world.

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By Pavel Metveev March 21, 2016

Thought Leaders Corner

Bitcoin - On its way to success In our modern society, almost everyone has heard of bitcoin and synonymously associates it as the ‘digital currency of the Internet’. Many people know that bitcoin is valuable and can be used as a medium of exchange for real-life products and services. This is true - at last count, there were at least a couple dozen bitcoin payment processors helping merchants process bitcoin transactions.

The bitcoin retail POS (point of sale) infrastructure is growing. There are over 600 bitcoin ATMs all over the world. Most importantly, if the increasing frequency of pop culture references to bitcoin is any indication, bitcoin is in the early stages of entering mainstream culture.

Despite this, it is still relatively hard to find merchants that accept it as payment. Why is bitcoin facing difficulty in getting merchants to accept it? The failure of merchant adoption is one of the biggest hurdles towards widespread consumer adoption, and leads to a chickenand-egg situation — if merchants won’t accept bitcoin, consumers have less incentive to hold the cryptocurrency in the first place, which further reduces all around adoption.

Problems with merchant adoption that no one likes to talk about Globally, it is estimated that around 3 to 12 million people hold about $6.4 billion worth of bitcoin. As of 2015, an estimated 100,000 retail merchants

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accept Bitcoin as payment. This includes big companies like Microsoft, Expedia and Zynga, among others. However, the reality is that the average merchant processes so little in bitcoin sales that it’s usually not even worth the extra effort and cost to enlist the services of a bitcoin payment processor and train staff in brick and mortar shops on how to accept it.

The numbers show: bitcoin adoption by merchants has decreased significantly from more than 16,000 new businesses that started accepting it in early 2014 to less than 2,000 new businesses that chose to start accepting it in early 2015. Anecdotal testimonies also come from less-than-enthusiastic merchants who have contemplated — if they haven’t done so already — stopping their acceptance of Bitcoin as payment altogether. A similar (though not equal) comparison can be made with cheques. Too few people use bitcoin, so it is not practical nor costeffective for merchants to keep the systems to accept it running.

The solution — the cards network One of the biggest reasons why merchants don’t find Bitcoin appealing as a form of payment, aside from the extra costs and work, is because it’s still considered hard to understand. The concept of global, Internet-based currency that is barely 7 years old can deter many merchants from using

it altogether. To put it simply, Bitcoin’s newness makes it unfamiliar to many merchants.

So it makes sense to combine Bitcoin with another payment method with established presence — the cards network — which also lends a physical form to bitcoin. The familiarity and the assurance of the cards infrastructure is the solution towards wider bitcoin adoption. By linking bitcoin to the cards network, merchants do not need to implement any extra and specialised bitcoin payment processors. They can accept it within the existing credit card payment system.

This is not a perfect solution. It does nothing for bitcoin visibility. However in terms of ease of use, simplicity, and acceptance, taking advantage of the existent infrastructure for cards is the best and most cost-effective method for increasing bitcoin adoption and usage.

The four big advantages of the bitcoin debit card As a payment method, bitcoin debit cards hold multiple advantages over fiat currencies and even traditional bank-issued cards. For one, the cards are linked to Visa or MasterCard, which means that they offer the benefit of almost universal acceptance at online and offline shops and ATMs. This is in contrast to fiat currencies, where you can’t use one country’s currency in another country, despite both technically being recognised as money.

Secondly, bitcoin debit cards offer more freedom, as they are not tied to banks, which can block users’ cards at anytime. For this reason, bitcoin debit cards have been called ‘the best companion of the tourists’. Additionally, beyond being a travel accessory, bitcoin’s non-attachment to banks also means that card providers have to ensure the best possible digital security for their users.

The added security — multisig technology, twofactor authentication, email confirmations, pins, and other security features — make it almost impossible for funds to be stolen.

The third advantage is that bitcoin as a currency has continued potential to appreciate. It was the best performing currency in 2015 when its value increased by 35%. However, this poses a problem, because the reverse can also be true.

Cryptocurrencies can be volatile. The best way for users to protect bitcoin’s appreciation potential while minimising risk is to use 2-way bitcoin debit cards, which allow on-demand conversion between bitcoin and fiat. This way, users can benefit by using the stronger currency between

the two at any given time.

Fourthly, and perhaps the most important advantage of all, is that the cards network make bitcoin spending significantly easier for both seller and buyer. Merchants do not need to add extra steps in order to include bitcoin payment processors, and bitcoin users do not need to limit themselves to the small number of bitcoin-accepting merchants (just 100,000 out of millions).

It can be argued that this relatively new product is the next step in Bitcoin evolution, as a currency is only as good as its payment infrastructure.

Where bitcoin payment processors have failed, the card network helps Bitcoin to adapt to the current system and be more user-friendly.

Without this step, Bitcoin could face a slow death into obscurity, limited to usage by early adopters, and never making it to the mainstream public.

The future of Bitcoin is the cards network As the world gets more globalised, so do her inhabitants. There is high demand for a global money like bitcoin. It is secure, accessible to the underbanked and unbanked, cloud-based, and allows fast and affordable remittances without geographical limitations. As smartphone ownership has become commonplace in developed countries, and increasingly in developing countries, companies like Wirex offer a complete banking platform that requires nothing more than a smartphone and a debit card.

Given this demand, the future of bitcoin integration into the cards infrastructure looks bright. Applied together with mobile banking infrastructure, it will disrupt the financial industry as we know it.

Wirex is the new and improved hybrid personal banking solution. We are the first company to combine the speed and flexibility of blockchain finance with the acceptance of traditional currency in one account. Additionally, we integrate secure bitcoin wallets linked to Visa and MasterCard debit cards with the convenience of mobile banking.

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By Shaya Posner March 25, 2016

Payments Fraud – What it is and how to manage it effectively Battling eCommerce credit card fraud can be an incredibly time consuming, often frustrating, endeavor. Many companies have dedicated staff or entire fraud departments focused on reducing fraud. Often, the cost of running a fraud-prevention campaign can be more costly than the losses incurred by fraud. A successful anti-fraud solution targets the cost of fraud rather than fraud itself.

To calculate the true cost of fraud, all the contributors warrant consideration. The easiest one to assess is chargebacks, the value of stolen merchandise. Equally costly, however, is revenue lost due to false positives. Commonly, the severity of said loss is curbed by merchants arduously manually reviewing copious transaction. Thus, merchant time and energy spent on reviewing transactions, in addition to overall campaign maintenance, contributes greatly to a merchant’s cost of fraud. Lastly, the cost of purchasing or subscribing to anti-fraud software and/or fraud insurance is an integral part of a merchant’s true cost of fraud.

At the recent MRC convention in Las Vegas I took every opportunity to speak to eCommerce merchants about their fraud experiences and challenges. Listening to their accounts took me back a few years to 2009, where I had been confronted with an inordinate amount of fraud targeting A4Cc, the retail arm of an electronics wholesaler and reverse logistic company I had launched. The task of manually reviewing orders, setting risk thresholds, re-adjusting said thresholds on a nearly weekly basis, and the constant necessity of adding and removing rules all served to propel my search for a better fraud prevention solution. The merchants I encountered all shared a similar desire, to discover technology that would reduce or eliminate the need for manual review.

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There are many fraud prevention techniques and technologies available, each with a benefit. It is relatively simple to identify the obviously legitimate or fraudulent transactions. The challenge lies in minimizing the amount of transactions that land in the grey area (which often comprises the list of transactions that will be reviewed manually). Every layer of technology added to identify fraud, acts as a new perspective, which when utilized correctly will assist in minimizing the grey area.

Many gateways allow eCommerce merchants to set up some basic rules to block transactions that may be fraudulent, such as when there is an AVS/CVV mismatch. However, important data provided by the gateway or processor can be extremely challenging to leverage. Hence, in most cases they are either completely disregarded or configured to decline in the gateway whenever they are not a match. Either one of those options are flawed, either by being too strict and declining many legitimate customers or too lenient and taking more risk than necessary.

Many eCommerce merchants will add another layer of protection by having employees review purchases over a certain dollar amount. However, the typical eCommerce merchant does not have access to technology such as IP Tracking, Device Fingerprinting, Proxy Piercing, or Global Black Lists. Each of these technologies would add another layer of fraud prevention. A merchant can manually access these technologies, but it is costly in terms of employee time and error.

Another fraud prevention option is fraud iInsurance. Insurers will review transactions, block transactions with a high suspicion of fraud and insure the company against fraudulent transactions. But insurance is very expensive and the false

positive rate is often higher as the company protects itself against paying out insurance claims and veers heavily on the side of caution.

An effective fraud prevention solution layers multiple technologies and analyzes every piece of data from varied databases and sources. Generally, the more technology and data one can collect, the more effective the campaign, and the less manual review required. Unfortunately, many such solutions are geared for large enterprises, are incredibly expensive, and take time and resources to integrate. They also require a high level of risk and fraud expertise to manage and maintain to be continually effective. Such solutions are not in the reach of many companies and are often not cost effective.

I believe that a fraud prevention system should be intelligent, capable of determining the difference between a typo and a fraudulent attempt. The system should be agile and aware of every new fraud development so that it could adapt as quickly as fraud changed. It should be easy to use and even quicker to run, so as not to slow down a purchase. But most importantly, a fraud prevention solution should be affordable and cost-effective.

After much effort and collaboration, I co-founded NoFraud, a full-service, decision oriented fraud prevention solution that frees merchants entirely from the difficult and expensive task of fighting fraud. NoFraud’s primary objective is to reduce, even eliminate, every contributor to our customers’’s true cost of fraud. We work as hard to legitimize an order as we do to block a fraudulent one.

NoFraud is positioned between the merchant’s shopping cart and gateway. Fraudulent transactions are declined while still in the merchant’s cart or on the checkout page, so customers have a chance to correct errors before being declined. Our technology makes decisions within milliseconds, never affecting the shopper’s experience. Our algorithm learns from

Shaya Posner launched A4c, the retail arm of an

electronics wholesaler. After facing an inordinate amount of fraud, he built an algorithm that fused every fraud prevention technology with human intelligence to eliminate fraud without erroneously blocking legitimate transactions. Realizing the efficacy of this solution, he launched NoFraud in 2015.

fraudulent behaviors across its customer base so that all merchants benefit when new fraud trends are detected. The team also monitors declined transactions to ensure that our software isn’t blocking any legitimate transactions. Best of all, we have no monthly minimums or long-term contracts.

Our solution integrates within minutes and can be tried risk-free.

Finally, there is an affordable and effective fraud prevention solution.

About NoFraud NoFraud is a full-service solution. AVS/CVV is built-in, it works in real-time, has a live cardholder verification team, and provides merchants with white/black lists. Setup is a simple gateway URL change and pricing is transaction based. NoFraud is certified as PCI compliant at the highest level.

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How one FinTech innovation could change the way you manage and control corporate expenses The FinTech sector is about innovation.

But which technologies will change the financial and business landscape now and well into the long term? Virtual Card Numbers is a technology that is being successfully used by some of the world’s biggest companies and yet it is relatively unknown.

Conferma has been pioneering and developing VCN technology for 10 years.

Its clients alone handled $2.5bn worth of transactions with its VCN technology last year. What is more, Conferma counts 20 card issuers including Citi Group and Barclaycard’s Precisionpay, which is its fastest growing product set in commercial payments, amongst its client base.

Simon Barker, CEO and founder of Conferma gives us an overview of the payment technology and why its potential is something that we should take note of over 2016.

What is a VCN The term ‘virtual’ can be misleading. A virtual card number is a normal 14, 15 or 16-digit card number which banks issue from their standard Bank Identification Number ranges.

Just like physical payments cards they also carry an expiry date, the

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cardholder`s name and a three or four digit CVV or security code. However, instead of being stamped physically across a plastic card, the number is generated digitally at point of sale and used for that designated payment only.

VCNs don’t look any different to merchants and are processed as standard Cardholder Not Present transactions. Restrictions can be placed on how the VCN is used — including the merchant category code, amount and date range in which the VCN can be charged.

VCNs are proving popular because of the advantages they hold over rival payment methods. A traditional centrally billed account, for example, is often not PCI compliant and can pose a security risk.

The other alternative is issuing payment cards to individual members of staff but, as we shall explore in this article, this

option holds the risk of expense claims not being right.

VCNs helping with the complexity of expense management The vast majority of businesses are sensitive about their data security and protection. Recent data breaches and hacker attacks over confidential information have been a reasonable justification for concern.

Yet it’s not simply your own business you should be worried about. Take a moment to think about how many different suppliers your payment details are stored with. Financial services, office supplies, IT supplies, caterers… anyone who supplies goods and services to your company is likely to have payment and other details about your business on record. All it takes is just one of them to have a data breach and you are compromised.

Because VCNs can only be used for a specified purpose and have randomly generated number, if it falls into the wrong hands, it is useless. Using VCNs to pay your suppliers means that they don’t have any payment information of yours on record and, if they have a data breach, your payment information will remain safe.

Controlling the management of expenses is another area where VCNs can add significant value. Because VCNs are for specified purposes, time frames and amounts, they cannot be misused.

For example, setting the date range in which the VCN can be charged, means that employees no longer need to use their personal cards. This eliminates the practice of expense claiming causing cash flow irregularities. Moreover, VCNs immediately do away with the risk of employees filing incorrect expenses claims. .

VCNs and efficiencies Managing expenses is time and costconsuming. There are receipts to be collated, forms to be filled out, checked, counter-checked and signed, payments

to be approved and cost-centres to be reconciled against.

All of these cost money but, with VCNs they needn’t as they are all done automatically. The VCN eliminates the need for expenses to be paid to employees as everything is paid for with the VCN. It takes away a labour intensive process and replaces it with a fully automated process. And that is always good for those profit margins.

Conclusion The VCN is a FinTech innovation that empowers business payment and solves problems identified by business leaders as having a significant impact on their companies.

We believe that it is set to revolutionise payments in 2016 and beyond, bringing much needed security, automation and simplicity to corporate expenses at a time when this has never been more vital.

Digital economy Just about every aspect of our personal and banking lives is handled digitally now and we are all reaping the benefit of simple, secure and speedy finance.

Yet, so far, expense management is lagging far behind.

With the VCN the whole process is digitised and the time consuming paper handling becomes a thing of the past.

Simon Barker

Co-founder and Chief Executive, Conferma.

Prior to establishing Conferma in 2004, Simon accumulated vast experience of the business travel industry during 18 years as Managing Director of NIS Travel Management Solutions.

Simon’s industry experience spans many disciplines and his particular interests lie in emerging technologies, settlement and distribution.

In addition to the travel industry, Simon has interests in a number of privately owned Leisure and Property businesses.

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Expert Interview Vanita Pandey is the vice president of products at ThreatMetrix. Prior to that, she worked at leading financial institutions like Visa, Capital One, Standard Chartered Bank and ABN Amro Bank. Vanita holds a bachelor’s degree in physics from the University of Delhi and an MBA from UC Irvine.

Vanita Pandey VP Product Marketing, ThreatMetrix

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ith the growth of online and mobile transactions out s triving brick-andmortar commerce there are also more challenges players in payments world must face. We talked to Vanita Pandey who gave us a very good insight into the current cybercrime and fraud domain.

What are the greatest fraud-related challenges merchants are facing today?

Merchants are operating in a global economy where they have access to consumers from all corners of the world.

Meanwhile, the fraud climate is complex and ever-changing, and it is hard to keep up with the sheer quantity of intricate technical mechanisms employed by cybercriminals to gain access to data.

In a post-data breach world, identity information, payment credentials,

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account credentials and responses to security questions are widely available for purchase in bulk. Complete fraud exploits and zero-day attacks are also easily available on the black market for outright purchase or as a fully hosted/ managed service. Alarmingly, these fraud offerings come with online help and full technical support.

Fraudsters use multiple attack vectors (the method of attack) and attack surfaces (the components on which the attack is launched) to create fraud attacks on merchants. The attack vectors include stolen credentials, device malware (to distribute attacks), web threats (BOTS, proxies, hidden VPNs, scripts, etc. that enable attackers to mask the attack source) and mobile application vulnerabilities.

Attack surfaces are the transaction components that are vulnerable to third-party interference and include the device, the transaction, the transaction context and the mobile app.

By combining these attack vectors and surfaces, fraudsters are able to create endless combinations of attacks that cannot be mitigated with disparate point

solutions, making multi-dimensional insight crucial.

How do fraud and authentication issues impact e-commerce and our struggling economy?

As more transactions move to connected devices, the digital channel is now the biggest driver of growth for retailers. In a digital world, merchants are able to form closer and more personal relationships with their customers. E-commerce and mobile commerce are both inherently data driven, and merchants are able to track and manage a lot of information about their customers. At the same time, customers are increasingly open to supplying more personal information with their trusted merchants. This has made merchants the target for attacks using stolen identities and credentials as well as attacks looking to steal consumer information available to the merchants.

As such, cybercrime attacks are no longer purely transactional. Fraudsters operate in complex criminal networks, sharing information and intelligence worldwide to increase their success.

Following the regular and high profile breaches of companies, personal credentials have flooded the dark web, ready to be bought up by the next criminal gang. These myriad pieces of personal information can be stitched together with data from further attacks to build convincing identity profiles that easily defeat static identity checking systems.

Fraud and authentication issues now have a broad impact on a business’ bottom-line. Merchants need to balance friction with user experience. Protecting the identities of users and employees means ensuring that only legitimate users gain access to the business platform.

Do you see criminal activity such as fraudulent new accounts, unauthorized account access and card-not-present transactions as a greater threat to enterprise or the average consumer?

These criminal activities impact both the enterprise and the customers involved.

I believe that we are now living in a world where access to digital services is now an integral part of one’s daily life. The impact of a potential attack on a merchant is mostly financial, unless they have been involved in a large-scale breach or have been targeted by an organized gang. In that case, there are downstream brand impacts that the business has to deal with.

Consumer impact, however, is more personal. In many cases, the consumers may be protected from the financial loss but the non-financial impacts can be severe and far-reaching. We fundamentally believe that the end users don’t differentiate between a network security failure or an account authentication failure, they simply care about the negative and far-reaching consequences of fraud. It is up to businesses to adopt robust fraud and security strategies that protect their end users, as well as secure their own revenue and growth. Users are increasingly demanding friction-free online experiences while expecting their transactions to be safe and secure. Businesses must ensure that the protection they put in place doesn’t end up creating a barrier to doing business.

What can consumers do to protect sensitive data and what should they do if their account details are exposed?

Consumers need to be aware of where they have left their digital footprints and personal credentials. Leaving seemingly benign but critical sensitive data on public sites is probably one of the biggest mistakes that an average consumer makes (taking a quiz on social media and giving permission to the app without realizing, or joining a free Wi-Fi network in a public area and giving permissions, for example). These seemingly unrelated data points are being stitched together

by the fraudsters to sign up for services, make purchases or request instant loans.

In the event that one’s account details are exposed, it is crucial to go back and change the password and other critical information on all sites and apps.

How does leveraging the collective power of your global client base assist in enterprise risk mitigation?

Cybercriminals have been fast to leverage the network effect and selforganize to exploit lax security and weak fraud prevention solutions. We believe that it takes a network to fight a network.

ThreatMetrix offers businesses a single fraud and security solution consisting of several tightly integrated fraud prevention technologies that support robust user authentication without adding friction. The ThreatMetrix platform includes multiple forms of device identity, malware protection, web threat protection, reputation and behavioral analytics.

The ThreatMetrix Digital Identity Network is the foundation of our solution and leverages anonymized global shared intelligence from daily consumer interactions including logins, payments and new account originations.

The Network harnesses real-time shared intelligence from billions of transactions collected against tens of thousands of

The cybercriminals’ technical mechanisms are intricate.

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websites and hundreds of millions of mobile devices worldwide. It pieces together a user’s true digital identity by analyzing the myriad connections between devices, locations, behaviors, detected threats and critical but anonymized personal information.

Digital identities can be continuously evaluated in the context of each and every interaction, correlating seemingly disconnected security incidents in real time.

This anonymized digital identity graph, coupled with powerful real-time decision analytics and an adaptable integration platform for mobile, web and thirdparty services, allows the vast majority of transactions and authentication attempts to be verified in real time against trusted patterns of behavior without adding friction to users and burden to business processes. High-risk anomalies are accurately identified for challenge or review, while crowd-sourced feedback and machine learning provide a solution that gets more effective over time.

What advice do you have for SMB’s and smaller organizations who are struggling to keep up with the pace of technology and security upgrades?

Digital commerce is providing a launch platform for small or niche businesses that previously struggled to keep up with the established players. Small retailers, internet-only banks, small lenders and niche insurance brokers can respond with more agility to meet the evolving needs of digital consumers. The big

challenge for these digital businesses is ensuring their fraud and security defenses protect against the full spectrum of attacks. Many companies are investing heavily in network security, ignoring the huge volume of attacks directly on user accounts, which are far from safe with basic authentication procedures. This is further challenged by the endless variety of connected user devices.

Smaller organizations are easy targets for fraudsters using sophisticated crimeware and malware tools. At the same time, consumers also hesitate to leave their credentials with the smaller merchants and that makes it even harder for them to differentiate between trusted consumers and potential fraudsters. Using the power of the shared intelligence, these companies can leverage the information around their customers’ true digital identities to help identify good customers as well as understand the broad fraud and risk trends.

from static and isolated breaches towards highly organized, cross-border networked assaults. Consumers are increasingly demanding friction-free online experiences while expecting their transactions to be safe and secure. Businesses must ensure that the protection they put in place doesn’t end up creating a barrier to doing business.

As such, merchants need to balance friction and consumer experience with security. Attacks on merchants have evolved from being transactional to becoming attempts at getting access to their customers’ identities.

Businesses mus t fundamentally change the way they think about authenticating user identity, adopting a layered approach that can succeed where traditional methods in isolation are falling short. However, this relies on a single view of a user’s digital identity across fraud, security, compliance and risk departments, which can be challenging for many businesses due to lack of integration across legacy databases.

Merchants face a lot of challenges when it comes to m-commerce conversion, customer centricity and security. What is the impact of this mobile/omnichannel commerce on risk management?

In a mobile/omnichannel world, consumers increasingly move between devices and locations to access services.

The unique online footprint they leave as they transact online is becoming more intricate and networked. However, fraud attacks are following suit, transforming

ThreatMetrix®, The Digital Identity Company™, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 20 billion annual transactions supporting 30,000 websites and 4,000 customers globally through the ThreatMetrix® Digital Identity Network, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain, and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.

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Spotlight 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.

“WE WANT EVERYONE TO BENEFIT FROM THE BLOCKCHAIN TECHNOLOGY EVOLUTION" Pavel Matveev, Co-Founder, Wirex

As one of the three founders of Wirex, Pavel has led development projects and been a solutions architect for international IT companies. He has worked on high level IT projects with Barclays Capital, Morgan Stanley, BNP Paribas, Societe Generale, Credit Suisse and others. A FinTech expert, Pavel has been a blockchain consultant for some of the world’s largest investment banks.

How did your idea for Wirex originate and what is your mission statement?

The idea for Wirex originated from the lack of financial infrastructure combining digital currencies and traditional currencies that is catered to the general public. The founding team Dmitry Lazarichev, Georgy Sokolov and myself realized the potential of blockchain technology in making financial transactions faster, cheaper, more secure, and accessible to everyone, including 2.2 billion of the world’s unbanked.

Currently, as with all new technologies, only early adopters of blockchain technology get to reap its benefits - we aim to bring it to all.

Based on our 3 missions, we believe everyone should be part of the financial revolution and combine cryptocurrency with traditional currencies for daily finances for the best of both worlds. We also believe that everyone in the world should have easy access to banking services, and that geographical limitations in finance should be a thing of the past.

What is your core product or service and what makes it different?

Wirex’s core product is a comprehensive, all-in-one personal banking platform which is a hybrid system combining digital

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currencies and traditional currencies. Digital currencies make transactions faster and cheaper, while traditional currencies have almost-universal legitimacy and acceptance.

By combining both in one account, our users get to reap both benefits.

Within our personal banking platform, we offer 3 main, interlinked services. One is mobile banking through the Wirex app. When we say mobile banking, we mean complete mobile banking - users don’t need to combine it with desktop or go to any offices. Users can send and receive funds, link debit cards, and even verify accounts straight from their mobile devices.

Secondly, we offer Visa/MasterCard-linked bitcoin debit card which allows wide usage in the retail sector and ATMs. Thirdly, we have remittance services that is instant and easy to use from any internet-enabled device, including from Wirex app.

Unlike most traditional remittance services, our funds transfer service is cheaper and operates 24/7.

What kind of year do you foresee for your company and the industry as a whole?

Wirex’s predecessor, E-Coin (bitcoin debit card provider) had a very high growth rate at around 30% per month. Within one year, E-Coin grew to 100,000 users. We foresee Wirex performing at the same, or even better rate as the demand for financial services integrating blockchain technology is strong. With our extended services as Wirex, we expect to grow much faster. We are now much more than a bitcoin debit card provider. We offer something that does not exist in the market yet - an integration between digital currency and traditional currencies that is available as mobile banking service.

This is a very exciting time for the financial industry. There are dozens of blockchain-based startups, so we foresee the industry to continue expanding in the future.

What are the key hurdles for growing your business in the coming years?

As mentioned, there are many other startups that feature blockchain technology. Many of them, including us, use the bitcoin as a medium of exchange. One possible hurdle is bitcoin’s ability to enter public adoption. Can bitcoin attract more users beyond the community of early adopters? We believe so, and we are now at the critical stage where this is happening. Bitcoin’s volatility remain a challenge to gain public trust in the currency. However, recent trends look promising.

Bitcoin is the world’s best performing currency in 2015.

There are always hurdles regarding future regulations for the usage of bitcoin and digital currencies in mainstream use. We have seen bitcoin change and evolve over the past year and expect even more changes over the next year. It is hard to predict how those regulations will look like, and even harder to predict enforcement methods. We keep a very close eye on updates.

What are your thoughts on the current state of the industry and what will the most important opportunities be in this regard?

The current state of the financial industry is very exciting and fast-paced. Major financial institutions and countries are experimenting with blockchain technology. Many legislations and policies on blockchain-based financial transactions will be shaped over the next few years. Given the decentralized, global nature of digital currencies, we hope that this will help make the financial infrastructure safer and more trustworthy. There

is also the possibility in improvement of cross-border fraud investigations - something that was not properly addressed within traditional remittance services.

As smartphone ownership is commonplace in developed countries and increasing in developing countries, we see a high potential for mobile banking. We also see a huge potential in the remittance sector.

Any recent exciting news you would like to share with the payments community?

Wirex app will be a game changer to the payments community.

The app enables instant cross-border funds transfer straight from smartphones. This is a very convenient service, especially to frequent remittance sender like workers and students living abroad. For example, Wirex users can transfer money to anyone simply by inserting bitcoin addresses or even email addresses. The receiver can cash out the money instantly with a Wirex card from any ATM, or spend it anywhere Visa and Mastercard is supported. This saves so much time on both ends. There is no need to visit offices, fill in forms, and pay high remittance fees. The Wirex app will be available on both Android and iOS devices.

Wirex is very customer-driven and we take feedback seriously. Our customers use and embrace many types of payment options. We will support the ability to buy bitcoin with bank transfers and other alternative payments (such as PaySafeCard, AliPay and more). We are also integrated with Paypal, Amazon and Skrill so our users can move and transfer funds between them easily. We are open to collaborations with more companies in the future.

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CONSULTANT

CONSULTANT

Cologne | Germany

Leiden | The Netherlands

Leiden | The Netherlands

b

b

b

b

DEVELOPMENT TEAM

PROGRAMMER

MANAGER

ANALYST - C

Manila | Philippines

Wroclaw | Poland

b

b

DEVELOPER

PRODUCTION

SALES MANAGER LARGE

(PROGRAMMER ANALYST)

SUPPORT TECHNICIAN

& KEY ACCOUNTS

Warsaw | Poland

Warsaw | Poland

Amsterdam

b

b

b

SENIOR BUSINESS

ACCOUNT EXECUTIVE /

CARD ISSUER

DEVELOPMENT MANAGER

ACQUIRER DEVELOPMENT

RELATIONSHIP MANAGER

Atlanta | US

New Jersey | US

Amsterdam

SALES MANAGER

Singapore

b

019

Events Copenhagen - Denmark This is the Eurocentric catalyst for the growth and development of the Payments & Financial Services Ecosystem. With 2000+ attendees, including 250 CEOs, from over 1000 companies and 50+ countries, Money 2020’s Copenhagen launch is critical to realising the vision of disruptive ways in which consumers and businesses manage, spend and borrow money in Europe.

4–7

Johannesburg - South Africa

12–13

The evolution towards a Mobile Finance & Commerce (MFC) ecosystem is about providing platforms that anticipate and align supply and demand drivers. Transitioning to this new era requires omni-channel mobility & integrations, marketplaces, and predictive analytics.

Mondato Summit Africa 2016 will explore how Africa might again lead the way in deploying innovative use cases to achieve widespread adoption.

Dubai This event will provide a platform to the region’s retail bankers to analyse, evaluate and improvise their retail strategy in order to give a better customer experience and hence make profitable business. This expo will attract over 40 exhibitors and 1000+ visitors who will engage in focussed discussions and interactive panel discussions through its successful conference and offer rich networking opportunities to the attendees.

18–19

Sofia - Bulgaria

19–20

The event brings together over 5000 attendees from 60+ countries.

The 2016 edition is under the patronage of the President of Bulgaria and the Mayor of Sofia with the support of the European Commission.

During the event, the whole city turns into a great experience for the attendees from all around the world. It is a great mix of over 50 tech, art and digital meet-ups and music festivals.

Singapore

Discount Code: GCZS

This event is where the whole Asian payments ecosystem meets in one location. From leading decision makers in the banking industry to the top solution providers, the conference gives an once in a year opportunity for old faces and new to meet, connect and do business and network.

020

19–22

Events Birmingham - UK InternetRetailing Expo (IRX) provides you with two days of thoughtprovoking content and will showcase the latest cutting edge technologies from over 300 exhibitors in multichannel retail. Meet over 6000 visitors from multichannel businesses and key features include 80+ speakers at leading retailers, 15 clinics, 20 workshops, Digital Payments Theatre, Marketplaces Theatre and Digital Store and other attractions. Balance the elements of your multichannel strategy and learn from leading industry experts to put you ahead of the competition!

27–28

Mexico City - Mexico

27–28

This event is the most customer-centric marketing event in Mexico, bringing together C-Level, Senior Level Marketers, and hungry newcomers, to cover the leading themes in loyalty, big data, customer experience and payments. Among the participants are some of the most important names in Retail, Banks, Telecom, Insurance, Hospitality and eCommerce.

Washington D.C - United States This must-attend annual event for the prepaid community attracting the attention and support of the industry’s most influential players.

Benefit from 3 day of cutting-edge content, discussions and enhanced networking as you engage directly with those leading the way in prepaid compliance, legislation, regulation and innovation.

27–29

London - UK

27–28

This is a three day conference for software experts focusing on the specific technological needs of the financial industry. Topics such as low latency, messaging, exchange architecture as well as core Java technologies and continuous delivery are at the heart of this conference. This year, also introducing FinTech dedicated track.

London - UK This is a three day conference for software experts featuring indepth knowledge of the latest technologies and methodologies for lean businesses. Join the software delivery revolution for accelerated delivery cycles, faster changes in functionality and increased quality in delivery.

27–28

021

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