Category Archives: Credit Card Breach

Payments and Commerce Newsletter – September

This is a portion of my biweekly newsletter that I started earlier in 2015 to a small group of people that I communicate with often – a mix of Founders, Bank and Retail Execs, VCs, and others who find their work intersect with mobile and commerce. The last one to go out is pasted below, so you could see what it’s normally about: my posts, thoughts about other posts I have read, my take on interesting industry bits, and other perspectives. If anyone wants to be included in the distribution – email me at cherian(.)abraham(at)experian(.)com.

What it is -> A quick read and meant to be useful.
What it is not -> Not meant to make you buy stuff, not meant to use your email for other things. Continue reading

Rampant: Explaining the current state of Apple Pay Fraud

Two quick notes before I trade a chilly 36 for a blistering 96, and spend the next few weeks in India. First up is on Samsung’s acquisition of Loop Pay. Second is a followup on Apple Pay Fraud that has now graduated from an itch to a raging infection. Continue reading

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Apple Pay : What happens when it hits 100%

lucy

What happens when Apple Pay hits 100%? I am not talking about 100% merchant acceptance, as much of that is driven by an alignment of merchant interests – cost reduction, potential for increased sales and marketing etc. Instead, I am talking about coverage – the share of total available cards across US banks that can be provisioned into Apple Pay. Today, partly due to the diligence of networks in signing up banks for AP, cards that are responsible for 90% of total retail payment volume are now ready to be provisioned. Separately, I am told 90% of issuer portfolios will be tokenized by end of 2015. (Forget/Ignore Private Label and Discover, for the moment) Continue reading

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Smart Mouse Traps and Lazy Mice

“Building a better mousetrap merely results in smarter mice” – Charles Darwin

Credit card issuers in general have a good handle on fraud. They manage it under 10bps (i.e. losses of $0.10 or less per $100 of transactions) on transactions made with a dumb plastic card lacking any additional context. So Issuers wishing for Apple Pay fraud to fall between 2-3bps was not totally out of character, considering the protections in place by Apple and Networks to keep fraud away – including Issuer support during provisioning, NFC, Tokenization, a tamper proof Secure Element and TouchID. But fraud seems to have followed a different trajectory here. About a month post-launch, it seems like fraud has come to Apple Pay. (in one case – as high as 600bps for an issuer that I cannot name). Though what follows was written in the context of Apple Pay, much of it translates to any other competitor – irrespective of origin, scale, intent, or patron saint. Continue reading

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From Chip to NFC: A necessary evolution

Consider this: Over its Sept 19th launch weekend, Apple has effectively shipped over 10 million EMV cards. Maybe these weren’t actual cards – rather, containers that could end up being a host to over 80M issuer cards eligible for Apple Pay. So how many among those will knock on a retailer’s door at launch? Initial device sales are to a loyal fan base. Should be easy to guess. Should be easy to spot too, as the aggregate NFC payment volume in US has never been more than a whimper. Continue reading

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The diminishing aura and utility of Coin

Coin

Much has been written of late, about Coin and its peers. Coin, Loop and others are worthy emerging players who have focused on innovating on the edges of the current payments framework – and consider convenience a more lucrative goal vs disrupting it altogether. Despite bank’s aversion to having their brands wrapped by a 3rd party – Coin and its peers have much consumer support. I have little to say about the product as-is – I think it’s a sexy widget, but for me – I am too cheap to pay for a plastic replacement when I carry around one already. However I believe they are intentionally evasive when it comes to their respective roles in an EMV landscape. Much of that follows focuses on Coin, but really – applies to Loop and others as well. Continue reading

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Tokens and Traditionalists

Stop-Hating_1066824Two recent comments led to this post. One is by David Marcus of Paypal who long held fast to his belief that NFC based payments had high barriers to entry – cost, complexity while offering very little upside. Paypal’s position on NFC (Not For Commerce) had always been a bit zealous – understandable as in a world of Secure Elements – Paypal (and many others) could not meaningfully participate. But Marcus’s recent post is an attempt to view NFC/HCE as one of the three trends that could transform the retail payment experience – is a pragmatic view to a complex and heterogeneous retail environment. Marcus speaks on how Paypal has come to adopt a cautiously optimistic view of NFC/HCE, now that there are no gatekeepers extracting a toll and because HCE (thanks to SimplyTapp) finally offers a level playing field in the Android ecosystem. Continue reading

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MCX Part II – Waiting to Exhale

Solipsism of Payments

For an ecosystem that has been described as unfair and out of balance, creating a prevailing atmosphere of mistrust, the payments industry should really look to the MacWorld Expo of 1997 for lessons to its future.

“We have to let go of this notion that for Apple to win, Microsoft has to lose.”

What Steve Jobs meant was that for Apple, this was not a zero-sum game. Apple dominated in the years since, by creating new markets, and devices that captured both minds and marketshare. Continue reading

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Lessons from a breach

iceberg

In the days following the Target breach, both clarity and objectivity are in short supply. Everything that didn’t already exist became suddenly the cure-all – EMV being one. Retailers bristle, albeit in private – due to the asymmetry in blame they have come to share compared to banks – despite having equal ownership of the mess they have come to call payments. Issuers and Schemes scramble to find an empty deck chair on the Titanic, just to get a better view of the first of the lifeboats capsizing. Continue reading

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