Live from (R)Evolution - The Prize is Growth: Risk Mitigation

Chris Johnson, Head of Global Financial Services at Pitney Bowes hosts a panel of leaders from Bank of America, Transunion, ThreatMatrix and Wells Fargo to discuss payment security. Jamin Dick, SVP for Ecommerce Operations at Pitney Bowes follows with a discussion around "The Brave New World of Security and Compliance".

Wed Apr 26 21:48:00 EDT 2017

It’s the lead story on the nightly news. It’s that dreaded email. The retailer you bought from once two years ago or the one you buy from regularly has suffered a data breach and, either way, there is a chance that your name, email address, phone number, address and credit card number have been revealed to an unknown party or parties that do not have good intentions. Oh, and change your password. Change every password if you use the same one or a variation of the same across multiple sites.

I’ve personally been the beneficiary of credit monitoring from two major big box retailers. A nuisance for me for sure, but to the Brands, much worse. Lost sales, distrust and measurable decline in Brand and Company value. That said, recovery is possible. Providing customers free credit monitoring, special hotlines and yes, special offers, can make your security gap a momentary glitch for your Brand. But to achieve that recovery means a coordinated public relations strategy and, likely, meaningful investment in systems, processes and platforms to bolster security. 

Or, just do this in the first place.

Card not present fraud

Chris Johnson, President of Global Financial Services at Pitney Bowes, provides some context around the complexity of payments processing as credit cards have replaced debit cards as the most preferred payment method. “Fraud worldwide from credit cards, debit cards, and prepaid cards are over $17B and Card Not Present fraud levels are expected to increase to $7B by 2020,” Chris cautions.

Breaches, bots, click bait and scripted attacks are becoming widespread and well organized. 64% of consumers have been the victim of a data breach, 41% have had fraudulent charges on their credit cards and nearly half (49%) feel their personal information is less secure than it was 5 years ago.

A panel of financial services professionals including Vanita Pandey, Vice President, Product Marketing, ThreatMetrix; Pat Phelan, Senior Vice President, Digital, TransUnion; Elizabeth Ryan, Head of Merchant Services, Wells Fargo; and Tim Tynan, CEO, Bank of America Merchant Services (BAMS) discuss the forces at play.

Tim Tynan starts with “the macro forces” – who people are, where they are and where they are moving – and how the moments of taking payments, that transaction moment, is changing the way we live. Tim’s team at BAMS is been pioneering “Relevant Search” which Tim explains “looks left to right at login”.  Working with former Google engineers BAMS developed a set of algorithms that reduce cart-abandonment rate.

Vanita adds that consumer behavior has changed and they are open to trying new types of payments “taking us to the ‘post-plastic world’.”

Liz points out the importance of “reengineering your checkout line” and get as close to “tap tap” payment as possible.

She encourages retailers to think about how to get customers comfortable shopping with you on a regular basis especially with what she calls the “gorilla”, referring to personal data risk. 

This on the same day when an already embattled restaurant chain suffered a data breach.

In response, Tim cautions, “If you don’t protect end-to-end, you’re putting yourself at risk.”

Pat sums it up clearly, “If you’re upset, there is a 90% chance you are not coming back.”

Vanita declares: “We should build a firewall and make the hackers pay for it… The biggest firewall, by the way.”

Jamin's Advice: Great customer experience + don’t get in trouble

Beyond data security risk, Jamin Dick, Senior Vice President of Ecommerce operations at Pitney Bowes outlines additional risks facing cross-border retailers and shippers. Data breaches are definitely a nuisance, but in the world of cross-border shipping there are risks that have significant consequences.

  • Last June several UPS employees were injured when a large online retailer improperly shipped a corrosive chemical. That retailer was fined $350,000.
  • In July of 2013, an online seller convicted of selling night vision goggles to an undercover Customs and Immigration Enforcement (ICE) agent. For selling a controlled item to a denied party, the seller was sentenced to 18 months in prison plus 3 years of probation.
  • Just one month ago a parcel forwarding company was fined $27M for export violations ranging from altering item descriptions and values – describing weapon parts as “sporting goods accessories” – to shipping to denied parties.

Despite the risks, in the past, compliance meant delays, but the WTO Trade Facilitation Agreement implanted in February was ratified by 115 countries including the US with the objective of reducing delays at borders by simplifying customs procedures and improving enforcement.

While shippers can avoid these cross-border shipping risks by crossing fewer borders or enabling fulfillment of international orders from within the destination country, these limit business prospects. Shippers bear the responsibility for getting it right every time and eliminating/mitigating compliance risk can be and arduous task. This is the challenge that we (Pitney Bowes) tackle on behalf of our customers so they don’t have to.

Buyer and Shipper Aware

There’s no such thing as 100% secure and there never was. But you can take precautions and follow the rules and if you make a mistake, communicate it to your customers and be as transparent as possible.

Follow the action on the (R)evolution Live site.