Ai Editorial: Payment within a walled garden, one bait tough to ignore?


First published on 21st October, 2016

Ai Editorial: In an era in which we are talking of winning over “micro-moments”, ‘OS-Pay’ can propel consumers’ purchasing behavior. And it can help in controlling fraud, too, writes Ai’s Ritesh Gupta


No marketer likes to get locked in a particular data ecosystem. But, marketers at large, also can’t do without Facebook, Apple, Google, and if we talk of China, then Alibaba, Tencent, and Baidu.

Be it for brand awareness or completing a transaction on such 3rd party platforms, if there is no provision to get data out of an ecosystem, then it inhibits optimisation of the overall marketing initiative. The repercussions vary from wastage of ad expenditure to annoying a customer – say serving an ad repeatedly even if the customer isn’t interested!

So if we talk of Facebook, Google, Apple etc., then making the most of data from each ecosystem is must.

One might excel in search and the other could be sharp in the arena of apps or social. The challenge crops up when one tries to work on customer profiles or assess the overall customer experience.

On the positive side, ad tech companies like Bitly are looking at this conundrum, and offering trackable links in every channel for a unified view.

Lure of OS-Pay – conversion plus lower fraud risk

No doubt cross device tracking and attribution can be a tough task, but airlines need to go with the flow. The direction in which Google or Apple move, airlines, too, need to capitalize and assess where they can step up conversion, more so when transactions can be facilitated by that ecosystem only. In this context, the recent move by Apple Pay and Android Pay to enable users to use OS-Pay through a web browser is an important development.

This is what Android platform promises - be it your chosen app or checking out on Chrome, one just need to rely on Android Pay at checkout and leave the rest to “Android”.

Chargebacks911’s COO, Monica Eaton-Cardone asserts ‘OS-Pay’ can propel consumers’ purchasing behavior and merchants’ fraud management.

Not only “mobile consumers” are much more likely to complete a transaction, but fraud risk is minimized, too.

“With mobile payments, though, the risk of fraud is greater. There are additional hindrances when it comes to cardholder and device authentication. However, this fraud risk is minimized when transactions are processed with ‘OS-Pay’ mobile wallets; apps like Apple Pay and Samsung Pay could actually help deter fraud,” says Monica. She says no actual credit card information is exchanged between the cardholder and the merchant in the process of conducting the transaction. Moreover, sensitive information isn’t stored on the device or shared with the service provider. “Not only that, but Apple Pay and Samsung Pay employ biometric technology as a means of validating the cardholder’s identity.”

 “Both of these apps rely on biometric fingerprint technology in order to authorize a transaction. Therefore, in order for the user to authorize a transaction, the cardholder needs to provide a fingerprint. Not only is this a strong deterrent against unauthorized transactions, but the customer’s fingerprint attached to a transaction is very compelling evidence in the merchant’s favour in the event of friendly fraud.”

Being swift

Airlines need to support popular wallets and payment apps quickly. Imagine there are two customers - one has downloaded an airline app, whereas the other is keen on using 3rd party app/ wallet. Both are accessing same trip essentials, including an airline seat. So how should airline look at their own digital offerings, and also capitalizing on 3rd party mobile wallet payment platforms?

“Airlines are well positioned to capitalize on the earning potential associated with mobile wallets and branded apps. With the addition of up-sell options and full-service concierge, direct retail apps create an ample opportunity for savvy airlines to leverage current demands. Not only that, but by adapting tokenized technology, airlines can enhance security and reduce overall friction while simultaneously improving conversions,” says Monica. Traffic is key, and giving consumers a one-stop shop has proven to be the most winning solution.

Preparing for fraud

As Monica points out, there are 3 primary strategies for understanding and mitigating fraud, and the same holds true for up-and-coming technologies:

1.     Enriched data sources: Data analysis is one of the most important components of a successful fraud detection solution, says Monica. When it comes to new methods or technologies, there are additional elements required in order to perform a relevant analysis. Without knowing these elements and understanding how they relate to the overall picture, fraud exposure is apt to increase.

2.     Improved human intelligence: New technology also means new and unknown opportunities for fraud. “However, human intelligence in the form of manual review processes, improved quality control, and customer service checkpoints can help negate the threats that frequently accommodate these emerging payment techniques. Human forensics should be a top priority and aligned with any plans to implement a new method or payment strategy,”  says Monica.

3.     Collaboration and communication: Airlines servicing multiple countries with many departments are challenged with the task of maintaining continuity while implementing new initiatives. Establishing a feedback loop for fraud suspicions will help keep fraudsters at bay and prevent repeat attacks from happening. There are several types of evolving fraud—friendly fraud, for example. A large percentage of these risks can only be detected through communication and collaboration.

Closer to seamless experience

Today, we are talking about winning over “micro-moments”, and a key factor in same is enabling customers to shop and pay in an omni-channel environment. The ability to use Apple Pay and Samsung Pay for online purchases could streamline the process, considering the prowess of their parent companies. If the customer elects to use one of these methods, they wouldn’t have to worry about typing-in all of their cardholder information for each purchase; that data could simply be stored and recalled at will. As a result, customers would be less likely to abandon a transaction. Of course, as Monica says, this could also be a double-edged sword. There is a kind of balance between streamlining the process and encouraging customers to buy without first thinking through a purchase. As a result, this could lead to buyer’s remorse, which could mean returns or even chargebacks at a later date. Another point of friction could be recalling data smoothly across channels. “If a customer begins a transaction on one device but decides to switch to a different channel, that information will need to be immediately recallable. With even minor points of friction, the likelihood that a customer will abandon a transaction increases dramatically, so it would be wise to try and make the process as efficient as possible,” concluded Monica.

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