1. www.ovum.com © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Payment fraud: The customer view and business landscape in 2016 Kieran Hines, Practice Leader Financial Services Technology

2. 2 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. What are the prevailing attitudes towards fraud and how will this affect the industry in 2016? 200 banks and acquirers 450 merchants15k consumers

3. 3 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. About Ovum  Ovum is a global analyst house, headquartered in the UK  We provide our clients, some of the biggest vendors and enterprises in the space with:  Published research and data tools  Bespoke analysis and advisory  The Financial Services Technology team focuses on the Payments, Retail Banking and Insurance industries

4. 4 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Protecting against fraud is very much top of mind for the industry 72%58% 29%23% Growth of 6%+

5. 5 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group.

6. 6 What is the merchant view?

7. 7 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. 157,000 customers affected, 28k cards and 15.6k bank accounts Total estimated costs: £60 million 500,000 customers given free upgrade

8. 8 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Nevertheless, investing in new payment services to drive sales growth is key for merchants “I have a clear payments strategy” 74% “I plan to invest in accepting new forms of payment” 72% “New payment technologies will help to drive sales” 79%

9. 9 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Growth in digital commerce is a central driver of this investment * Merchants with 50%+ of their sales currently in-person/in-store Source: Ovum Enterprise Insights 2015/16 “I plan to invest in accepting new forms of payment”

10. 10 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Analysis of IT spending plans shows exactly where the industry is heading

11. 11 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. The focus is on delivering sales growth through better CRM or purchasing experiences Evolving retail models New payment experience New business model Digital wallets/card on file will grow in importance (although XS2A may change that)

12. 12 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Spending on fraud solutions is set to grow with expansion in digital channels Anti-fraud investments are growing with the shift into greater digital distribution

13. 13 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Complexity in the payment landscape is only going to accelerate Source: Ovum

14. 14 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. We live in the age of the smartphone pinky and the chelfie

15. 15 © Copyright Ovum. All rights reserved. Ovum is part of Informa Group. Thank you Kieran Hines, Practice Leader Financial Services Technology kieran.hines@ovum.com @KieranH_Ovum