#ATPS, Day 2 – Formulating payment and fraud strategies from here on

Secure remote commerce, chargeback management, lowering losses from false positives…a number of pertinent issues were discussed on the second day of ATPS Virtual Conference 2020.

22^nd October, 2020

Travel merchants, including airlines, are understandably prioritizing projects that can contribute to their immediate recovery. As for supporting interactions and payment methods that are touchless or contactless, airlines are starting to respond to the same, though the pace of the same can’t be compared with some of the other verticals.

Speaking on the second day of #ATPS, Keith Wilson, Director Of Strategic Merchant Relations at Discover, acknowledged that contactless payment option has been around for 12-18 months or so in the U. S. “…(it has) been proliferating fairly quickly. (It) really ramped up because in the grocery stores and other places that you would go to - not having to touch things is definitely a huge benefit. We haven't seen a lot of movement in travel. Of course, in the travel industry, there is a lot of ticketing and reservation systems that would involve massive changes.” It still hasn’t turned out to be a huge priority yet, but as Wilson mentioned, one airline has started to implement and contactless EMV for onboard sales and several other airlines are investigating as well.

Wilson also referred to the adoption of secure remote commerce or SRC.

SRC specifications pave way for a consistent UX for shoppers and overall simplified checkout experience. This way a consumer doesn’t need to re-enter information on websites that support SRC, thereby speeding up checkout time and reducing abandonment. No need to create an account. A user who enrolls in SRC and chose to have their device remembered will checkout as a guest on a merchant website they have not visited before.

Amidst signs of recovery don’t ignore the threat of fraud

In terms of recovery, there was reference to The Transportation Security Administration (TSA) screening over 1 million passengers last Sunday. This meant that highest number of passengers  were screened at TSA checkpoints since March 17 this year. Also, the weekly volume of 6.1 million, marked  the highest weekly volume for TSA since the start of the COVID-19 pandemic.

At the same time fraudsters haven’t stopped targeting the travel industry even though the sector has suffered immensely over the last six months or so. Rather than waiting for bookings to pick up, it is imperative for travel merchants to find way to “understand users to avoid losing legitimate travel shoppers”,  according to Hubert Rachwalski, CEO, Nethone.

Merchants shouldn’t rely only on historical transactional data, but as Rachwalski recommended, also take into consideration device info (spoofing detection, virtual machine detection etc.), network info (TOR detection, IP geo-location etc.) and behavioural info (e. g. mouse movement). Speaking at the #ATPS, he added that it is critical for any airline to lower the losses from false positives. “Evaluate the traffic in the background and pave way for a frictionless experience to shoppers,” he said.

One of the metrics Nethone uses to support the fact fraudsters are targeting the travel sector - is % of transaction attempts with signals triggered, i.e. 'Virtual Machine', 'Tor Network' and 60 others. And even though COVID-19 has caused the transaction volumes to drop sharply, the traffic with signals has almost doubled.

Looking at the future in a pragmatic way

Shazad Iqbal, Former Senior Payments Consultant (Commercial), British Airways referred to the significance of collaboration among various stakeholders, especially for data, for instance, in-depth analysis of transactions. Also, it is imperative to win back the confidence of travelers via transparent policies and initiatives. Motie Bring, CCO, Nuvei  also acknowledged that airlines can look at their “systems and partnerships” to let travellers pay in the manner which makes them feel most secure and confident about their transaction.

In the same session, Fernando Souza, VP Global Travel & Transit Solutions, Cybersource referred to the rise in touchless payment experiences, for instance, the use of public transportation services are increasingly facilitating such options. “We are seeing reduction in personnel  in the fraud management department,” added Souza, who added that airlines still need to improve automation of refund process. 

Alex Zeltcer, CEO & Co Founder, nSure.ai highlighted that the industry is going to witness last minute transactions. In this context, can airlines avail a chargeback guarantee offering, that takes on the liability for any fraudulent transactions? Zeltcer also highlighted that fraudsters can continue to break through rules in fraud systems, and the role of data and machine learning is going to be critical.

Amine Boulaghmen, Head of Payment Facilitation Solutions, IATA shared that airlines have to respond to digitalization, for instance, acting as retailers to offer a superlative experience. Also, since carriers have been left with no choice but to respond to changes in consumer behavior and cash flow-related considerations, payment-related processes are being addressed and improved. 

On the B2B payments side, the volatility, as expected, made the situation precarious for acquirers. How to understand all of the unique risks posed by airlines? A travel merchant might go out of business without delivering the bought service.

Brett Turner, Head of Global Airline Acquiring, SVP, Elavon highlighted the role of data. It is key to understanding contingent liability risk. “Help in understanding all moving parts like refund, vouchers etc. in overall tracking and managing of risk,” he said.

B2B travel payment options

In a session about how the relationship between airlines and travel agencies is evolving and is expected to shape up, Livia Vite, Head of Airline Partnerships, eNett highlighted that recovery initiatives post-COVID19 pandemic is going to result in a unique opportunity for both the stakeholders to work on a  B2B travel payments approach to benefit all in the travel value chain. “With all the risks and costs to the travel distribution landscape magnified post-COVID, both airlines and agents are now very aware of payment risks,” said Livia.

Delving deep into what each of the stakeholder needs to introspect, she referred to various aspects of retail model from an agency’s perspective. For instance, in case agents decided not to become a merchant then are travel shoppers going to comfortable with multiple transactions appearing on their card statements? How would the agent compete against agencies using the retailer model?

For their part, airlines must re-visit how travel agencies help them to expand their reach in terms of their role in facilitating access to away markets, and catering for local payment preferences in these markets.

“Many airlines and agents are using this opportunity to rethink their payment and/or distribution strategies and to start the conversation,” mentioned Livia.

This topic was also discussed in the final session of the day featuring Pascal Burg, Director, Edgar Dunn & Company; Stephane Druet, SVP, Head of Product and Marketing, CellPoint Digital; and Christophe Kato, Assistant Director, IATA.

Druet also spoke about cutting down on the overall cost per payment transaction by dynamically routing payments to local acquirers to reduce cross-border traffic (and fees). The panelists also spoke about payment orchestration and the importance of automating back-end processes like settlement and reconciliation and incorporate fraud rules and regulatory compliance, all of which reduce chargebacks and fraud.

By Ritesh Gupta

Ai Team