1. Improving Authorization Rates Internationally
John O’Brien - Worldpay
Peter Kovacs- New York Times

2. Agenda How to Setup for success! Working with Partners
Merchant Behavior
Adding influencers
Adding maximisers
Summary
Q+A

3. How to setup for success!
Optimization
Payments Team
Be Vigilant!

4. Optimization Our approach to optimization
Thanks to various stakeholders at The Times, we’ve been able to give payments a higher priority than ever before.
We have many optimization efforts queued on our roadmap, ranging from recurring payment optimizations, to partnering with alternate payment methods providers.
Our approach to optimization
Include payment optimizations in the Financial Planning process
Build a roadmap with an equal mix of large and small projects
Commit to analysis
Some optimizations from last year:
Dashboards (KPI / Response code)
Regional business hour processing.
AVS optimization by country.
Increase account update frequency
KPI and retry dashboards
Apply Pay launch
Things on our mind:
Alternate Payment Types
Carrier billing integration
PayPal BAID messaging enhancements
Business day processing

5. The Payment Team Result: increased speed to market. Goals:
Mission: laser focus on payments. This team launches new payment types, and optimizes payment processing to support our subscription business.
Goals:
Provide payment methods in various markets
Advise on changes that may impact our business
Monitor and optimize recurring payment processing
Members:
Leads team
Sets vision
Defines roadmap
Industry Trends
Product Manager
Business Analyst
Tech Lead
Marketing
Data Analyst
Project Manager
Developers QA
Requirements
Project execution
User Acceptance
Analysis
Industry trends
Tech design
Development
Maintenance QA
Roadmap support
Care and CS roll-outs
Campaigns
Requirements gathering
Industry trends
Analysis
Benchmarking
Reporting / dashboards
Project delivery
Communicates status
Coordination
Result: increased speed to market.

6. Be vigilant
We know the payment industry is ever changing, so we’re building tools to help us maintain high acceptance rates.
KPI’s
Segments
1) KPI dashboard
Define one or two KPI’s that you want to track
Identify segments
Initial Success Rate
91.36%
First Retry Success
Digital
International
Conf
Education
Measure the health of payment processing.
Chargeback Rate
Inv. Churn Rate
.07%
Conf.
Response codes by day
By BIN
2) Response code dashboard
Overall response code reports
Response codes by BIN
Early identification of potential issues.
3) Regular meetings with our processors and peers.
Review finding from your dashboards
Industry updates
Alternate payment types
Result: consistently high success rates that reduce involuntary churn. New ways for people to pay.
Keep on top of payment trends that affect our roadmap.

7. Working with Partners Merchant Behaviour Adding Influencers
Adding Maximisers

8. Merchant Behaviour
Our analysis suggests a direct correlation between Merchant behaviour and decline rates
The decline rate can be managed by: -
- Treating cardholders fairly
- Controlling chargebacks
- Controlling fraud
- Avoiding practices unpopular with issuers

9. Merchant Behaviour – Do’s and Don'ts!
Treating Cardholders Fairly
Controlling Chargebacks
Controlling Fraud
Avoiding Practices unpopular with Issuers
Know the actual price of the goods and services and there are no surprises
Receive the goods and services they have purchased
Allow ability cancel subscription based transactions
Optimise retry strategy– issuers may block the card if they see strange behaviour
Ensure you are not giving cardholders a good reason to charge back the transaction
Taking security features such as 3DS to control fraud chargeback
Using Fraud products to identify potential fraud
Ensuring you are responding to RFIs (Request For Information)
Supplying the correct documentation when attempting to defend a chargeback
Not all fraud will result in a chargeback
Taking security features such as 3DS, AVS and CVV2
Repeated attempts to recycle authorisations on a given day
Non-compliant recycling of authorisations – i.e changing the characterisations of the authorisation to circumvent issuers risk systems
Misuse of incorrect Merchant Classification Code (MCC)

10. Adding Influencers The key influencers are: -
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

11. Adding Influencers - Card Verification Value (CVV2)
- Looking at the basic decline rate for all CVV2 sent transactions vs. CVV2 not sent transactions would indicate a delta of 2.33%, in favour of CVV2 Sent.
- This comparison is flawed as the decline rate for CVV2 sent has an element of declines that are not influenced by the presence of CVV2. These transactions are known as CVV2 sent & not checked by the issuer.
- When we remove CVV2 not checked by the issuer, leaving only CVV2 matched & CVV2 Invalid (the true definition of CVV2 Sent), the delta increases to 6.74%.
- However, the delta increases to 11.85% when we compare CVV2 sent & matched v CVV2 not sent – therefore the key is to control the number of CVV2 invalid transactions.
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

12. Adding Influencers - Card Verification Value (CVV2)
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
Address Verification
Exploring the excessive use of ‘Do Not Honour’, our analysis suggests issuers are masking a high volume of invalid CVV2 declines. When looking at IEDD, invalid CVV2 appears, on average, to only represent about 2.25% of declines when in fact, looking at the CVV2 response approximately 33% of all decline carry an invalid CVV2.

13. Adding Influencers – The Payment Page
Luhn algorithm checks card validity
Expiry date validation – Ensure you can’t enter a date in the past
CVV2 help button
Dynamic CVV2 field length
Do not star out the digits for CVV2
Merchant A: reduced their invalid CVV2 declines by 16% by not using *** and configuring the CVV2 filed length
If AVS details are being collected – only house number and post/zip code required – not the full address
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
Address Verification

14. Adding Influencers – Address Verification Service (AVS)
Traditionally AVS has always been recognised as a fraud tool but Worldpay analysis over time, suggests AVS can also be an acceptance trigger.
In the UK, USA & Canada Card Issuers are mandated to respond to domestic AVS requests. It is worth noting that other issuers in Europe may also respond to AVS requests.
Whilst AVS can trigger potential uplifts in acceptance, it is very important to supply the correct data as invalid AVS can give a negative impact to performance.
Ensuring you have the up to date correct cardholder address details is key.
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
Address Verification

15. Adding Influencers – 3D Secure Authentication
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
Address Verification

16. The key influencers are: -
Adding Maximizers
Only when the solid basic foundation is established and influencers have been deployed can we look to explore the factors that can truly differentiate acceptance.
Dynamic 3DS
Utilising Issuer extended decline data to recycle cards or offer alternative payment methods (APMs) in an intelligent manner
Utilising Account Updater to obtain card updates
Using Zero authentication rather than nominal authorisation
Payday Cycles
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

17. Adding Maximisers - Dynamic 3DSecure
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Dynamic On

18. Adding Maximisers -Issuer Extended Decline Data
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

19. Adding Maximisers -Account Updater
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

20. Adding Maximisers -Using Zero vs Nominal auths
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
Visa and MasterCard have mandated the use of zero value authentication. Whilst some customers support nominal authorisations it could been deemed non compliant by both schemes. Previously this has not been an issue but Worldpay have been advised the schemes are now monitoring.
Overall we see a lower decline rate across our eCommerce book on zero value authentications.
The table compares the main issuer markets for Worldpay and shows the difference in acceptance between a nominal authorisation and a zero value authentication.
In the vast majority of cases zero value authentication has a better acceptance rate.

21. Adding Maximisers – Payday Cycles
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
- Looking at the UK as an example general declines and declines due to low funds follow a trend by day of the week.
- The analysis highlights that sales activity and more specifically declines peak on Friday for recurring or subscription type merchants.

22. Adding Maximisers – Payday Cycles
A pattern emerges within the various weekdays in a month
The last Friday of the month appears to be the worst.
Unsurprisingly this happens to be the day for processing weekly or monthly payroll and there is a strong correlation with declines due to insufficient funds.
The analysis confirms that both an earlier day in the week and an earlier week in the month are more optimal times to plan to push recurring authorisations.
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication

23. Adding Maximisers – Payday Cycles
Influencers typically provide a greater degree of security and comfort to the issuer when making an authorisation decision and are therefore important acceptance triggers.
The key influencers are: -
Card Verification Value (CVV2)
Address Verification Service (AVS)
3D Secure / cardholder authentication
- Our analysis identifies the hours, as well as days within specific weeks when decline activity, due to insufficient funds, is minimal.
- This could be a significant factor when planning the submission of bulk recurring authorisations.
- A typical uplift of 5% can be seen when choosing an alternative weekday to Friday and an appropriate time within that particular day to push your recurring authorisations.

24. Key Takeaways Know where you are in your cycle
Get by in from stakeholders
Hire the right team!
Do the basics first!
Work with payment partners for guidance
Constant Iteration

25. Thank you! John O’Brien, Worldpay Peter Kovacs, New York Times
If you have any questions about the presentation, go to our LinkedIn Group (the Payments Education Forum) and request an invitation (this is a closed group specifically for the payments industry).