1. Shining a Light on the Transaction Lifecycle
NED CANNING – VANTIV
MADDEN TITUS – NETFLIX
KYLE WILLIAMS– MASTERCARD
MICK OPPY – VANTIV

2. Overview
Falsely declined payments are an intensely negative experience for a customer
> Transaction lifecycle is often a black box
> Understanding parties in transaction can help
identify opportunities for alignment

3. Transaction Lifecycle WHO ARE THE PLAYERS AND WHAT DRIVES THEM?
Customer
Merchant
Acquirer
Network
Issuer Processor
Issuing Bank
INCREASE PURCHASE REV
DECREASE RISK / COST
BOOST RETENTION
INCREASE TXN VOLUME
REV PER TXN
MERCHANT RETENTION
REDUCE FRAUD RISK
DECREASE COST
INCREASE TXN VOLUME
INCREASE ACCEPTANCE
INCREASE TXN VOLUME
INCREASE CARDHOLDER SPEND
POSITIVE, SECURE EXPERIENCE
MAKE A PURCHASE

4. Lack of Alignment LOSS OF OPPORTUNITY
FRAUD SCREEN CALIBRATION
FRAUD – FALSE POSITIVE
Customer
Merchant
Acquirer
Network
Issuer Processor
Issuing Bank
DATA ENTRY ERROR
MID UPDATES
BALANCE DATA

5. Lack of Alignment LOSS OF OPPORTUNITY
SHARED GOALS: INCREASED SPEND, POSITIVE CONSUMER EXPERIENCE
Customer
Merchant
Acquirer
Network
Issuer Processor
Issuing Bank
SHARED CONCERNS: COST OF FRAUD
INCONSISTENT ACCESS TO DATA and DISCONNECTED FRAUD STRATEGIES

6. PANEL DISCUSSION MADDEN TITUS – NETFLIX PAYMENTS
KYLE WILLIAMS – MASTERCARD PRODUCT
MICK OPPY – VANTIV FI PRODUCT

7. PANEL DISCUSSION How does your team define success today?
How do you measure performance against that definition?
What historical experiences have contributed to this focus?
What are some particular instances in which you have partnered with other players in the payments value chain, specific to transaction processing?
What are the primary pain points in day-to-day operations? In longer term strategic planning?

8. QUESTIONS? NED CANNING – PRODUCT MANAGEMENT – VANTIV
MADDEN TITUS – GLOBAL PAYMENTS – NETFLIX
KYLE WILLIAMS – PRODUCT DEVELOPMENT & INNOVATION – MASTERCARD
MICK OPPY – FI PRODUCT – VANTIV
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).

9. APPENDIX GET THE BASICS RIGHT TO INCREASE APPROVALS
> AU for recurring and COF > 0 / 1 Validations > CVC/CVV2 and AVS > Recurring indicator (US, CA, UK, EU) > eCommerce indicator in international markets > Call volumes to issuers matter > Keep MIDs clean
use account updater for recurring AND card-on-file / mobile transactions. Account updater participation is now mandated by Visa, MasterCard in the US, Canada, UK, and Brazil, as well as an expanding number of regions in Asia
validate your cards with $0 (Visa, MasterCard) and $1 (American Express) auths
include CVC / CVV2 and leverage AVS when validating cards,
use the recurring payments indicator in markets that accept such payments (US, Canada, UK, some regions in Europe), and the eCommerce indicator for international markets and cards from international issuers that are less friendly to recurring
use billing descriptors customers can recognize and respond to (with phone numbers!)
Encourage your customers to call their issuing banks following a decline, or call them yourself. Issuers pay close attention to call volumes following changes in fraud rules
Keep your MIDs “clean” – keep your chargebacks low and try to qualify for low-risk MCCs

10. APPENDIX NEXT LEVEL STRATEGIES FOR APPROVALS OPTIMIZATION
> BIN Analytics – track acceptance rates, card use > Triage decline spikes with acquirer (or issuer) > Experiment with routing > Intelligent recycling > Make fraud rules dynamic and adaptive > PINless can help > 3DS and security products can help
BIN analytics – start with a BIN list that includes card type, card product description, country of the issuing bank, account updater participation, and full account range data
Track acceptance rates by BIN / Country / Acquirer / Auth amount
Track changes in card use by customer following a decline – showing issuing banks when and how often they lose top of wallet is information that can influence issuers
Look for decline spikes by issuing bank. If % of your transactions are being declined an issuer or issuer country, there may have been a rules change. Contact your acquirer or issuer to resolve.
Experiment with routing – have multiple acquirers globally by region, and see which issuers favor one acquirer over another by rerouting declines instantly
Retry authorization declines intelligently. For example, try to hit paydays in the early AM before other charges hit the account (Friday in the US, 15th of the month in LATAM)
Experiment with data included in the auth – some issuers may favor inclusion of expiration date, or authorizations at a certain time of day
Rely less on rules-based fraud management and create (or partner with) a more dynamic, analytics-based system, using rules only to fine-tune the system for short-term fraud events
PINLess debit networks (PULSE, Star, etc.) may return higher approval rates for debit. Ask your processor which PINLess debit networks they support, and if they can route such debit transactions dynamically.
Reevaluate your use of 3D Secure, especially internationally in the UK, Scandinavia, and India. Newer versions (1.02 and later) cause less friction for the consumer, and may increase approval rates more than 200 basis points with some issuing banks.
Assurance iQ from MasterCard allows you to pass additional data such as IP geolocation and device ID to issuing banks in the form of a score that may help with card acceptance. Contact your acquirer to begin testing.

11. APPENDIX MASTERCARD’S LAYERED APPROACH TO SECURITY1
Securing The Account 2
Securing The Cardholder 3
Securing The Transaction
Is this an authentic payment account?
Ensuring the card or payment device is genuine and that the information is protected.
Are you who you say you are?
Ensuring the rightful owner of the card is the person transacting by verifying trusted identities.
Does the data fit expected patterns?
Ensuring the transaction is genuine by analyzing account, cardholder and environmental data.

12. APPENDIX MASTERCARD’S LAYERED APPROACH TO SECURITY
PAN-Based
Token-Based 1
Account Authentication
Account Validation
Account Listings
Device
EMV
Digitization
CVC1 Validation
CVC2 Validation
Dynamic CVC3 Validation
Spend Alerts and Controls
Automatic Billing Updater
Lost Stolen API
BIN Table Resource
Negative Listings
Assurance IQ
M/Chip Cryptogram
DSRP Dig Secure Remote Pmt
MasterPass Wallet
MDES Tokenization
Contextual
Physiological 2
Cardholder Verification
Consumer Data
Passcode
Geolocation
Biometric
Address Validation
PIN Validation
SecureCode
Location Alerts
Identity Check
Prevention
Decisioning
Transaction Authorization 3
Fraud Blocking
Spending/Fraud Alerts
Fraud Scoring
Fraud Management
Transaction Decisions
Safety Net
Transaction Blocking
Spend Alerts and Controls
CardAlert Fraud Manager
Expert Monitoring
Fraud Rule Manager
GateKeeper
Simplify Commerce
Fraud Dashboard
Advisors AFC Diagnostic
MasterCom Disputes
Decision Intelligence
Authorization IQ
Assurance IQ
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