February 10 2015 2014 Wells Fargo Bank NA All rights reserved Member FDIC Paul Uher SVP Regional Sales Manager Topics Card processing 101 Trends in the consumer bill payment space ID: 735571
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Slide1
Credit Card Processing & Controlling Costs
February 10, 2015
© 2014 Wells Fargo Bank, N.A. All rights reserved. Member FDIC.
Paul Uher
SVP, Regional Sales ManagerSlide2
Topics
Card processing 101Trends in the consumer bill payment space
Innovation focused on bill payment & mobile
1Slide3
2Slide4
Merchant 101 - 4 components of cost
3
5%
90%
5%Slide5
4
What is the 4th
component?Slide6
5
Single integration for multiple channels
Consolidated reporting
Common GoalsSlide7
Source
: United States Federal Trade Commission, Consumer Sentinel
Network July 12th, 2014
Credit card fraud continues to grow
37%
incurred by merchants
mainly at point of sale
from counterfeit cards
$399
average amount of loss
10%
of all Americans have been a victim of credit card fraud
6Slide8
2013
2014
R
ecent data breaches
(# accounts compromised)
In the last year, millions of accounts have been compromised
Target Corp.
40 million
November
Home Depot
56 million
September
Neiman-Marcus
1 million
October
Source
:
need attribute here
7Slide9
E
urocard
M
asterCard
V
isa
The time for change has come – and the deadline is October 15, 2015
Has reduced “card present fraud” by 84% in Europe
1
Liability for counterfeit card transactions
will shift
to merchants not supporting new EMV standards
1
Visa
and EMVCo
studies
8Slide10
An EMV
card has embedded chip
with encrypted information
Transmitted
when
in
close proximity of
EMV reader
Nearly
impossible to
counterfeit
9Slide11
Fraud Management
Decision Manager
Protect e-commerce profits with fraud protection toolsEvaluate transactions in real-timeDevelop a comprehensive fraud protection strategySpend less time on manual reviews
TransArmor
Securely process credit card data with tokenization
10
Layer 1
EMV
Chip
technology adds security at the exact time the card is being authenticated by the terminal (card present only)
Layer 2
Encryption
Secures
transaction data as it is sent for authorization
Layer 3
Tokenization
Tokenization replaces sensitive payment card transaction data in the merchant environment
TransArmor solutionSlide12
In the meantime, Mobile Wallet is changing the way people pay
N
ear
F
ield
C
ommunication
Only a small percent of merchants have upgraded to NFC terminals
The growth potential is large
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How Mobile Wallet works
*
*
*
*
Enter Password
...choose pay method
...hold close to NFC reader
...data transfers
Mobile wallet
12Slide14
All data and transmissions are encrypted
Smart phones can be password protected, GPS located and disabled if lost
or stolen
17263748484946
*********
This technology increases security…
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*
*
*
*
…reduces fraud risk…
EMV and NFC transactions can enforce additional security if PIN entry is used
Apple Pay integrates fingerprint biometrics as other manufacturers work to add voice and face recognition
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Consumer Behavior is Changing
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U.S. mobile
p
ayments
(Billion $)
>50%
CAGR
16%
of smartphone owners have made
a
mobile bill payment
One Billion
smart phones sold
in 2013
Half
of all e-bills
w
ere delivered via a
b
iller website
or mobile app
Nearly
50%
of businesses plan
to optimize their
mobile commerce site
Sources: First Data, Carlisle & Gallagher Consulting Group, Square, Intuit,
internal analysis
With SmartPhones being the catalystSlide17
o
f Smart Phone users have enabled a Mobile Wallet application
20%
iPhone iTunes account owners are now Apple Pay™ eligible
800M
Apple Pay enabled devices projected in use in U.S. by end of decade
70M
of installed credit card terminals are currently NFC compatible
and yet… 2%
Sources:
Apple statistics: www.theverge.com/2014/9/9/6084211/apple-pay-iphone-6-nfc-mobile-payment
Other statistics: www.businessinsider.com/two-in-five-americans-will-use-mobile-wallets-by-2017-2014-1Slide18
Mobile bill pay is exploding
17
Mobile bill pay more than
doubled
from 2012 to 2013.
16% of households
paid a bill with their smartphone in 2013,
compared to 8%
in 2012
Source: Mobile
bill payment surge, Fiserv, February 2014.
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Quick Response (QR) codes
2D barcodes read by smartphones or tablets
Codes are printed on paper billsBill recipients use smart phone apps to “read” codesCan redirect to biller’s homepage, biller’s bill payment site, or a bank’s online banking siteMost popular amongst 25-44 year olds (55% of scans)
Utilized by various billers and bill aggregators
18
Source: DST Output 2012Slide20
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Technology for the Next GenerationSlide21
IBM
5100
portable computer
55 lbs.
.000064 GB
$20,000
Apple
iPhone 6
6 oz.
128 GB
$
500
Over the years…
1978
2014
20
Some things have undergone massive changeSlide22
Uses for Mobile apps and payments
Parks & Rec payments and gift cards
Tax payment collection by field agents or installment paymentsDMV appointment scheduling and paymentParking & citation paymentsHearing scheduling
Hunting and fishing permit purchases
Utility payments
21
Source: DST Output 2012Slide23
Thank You
Paul UherSVP and Regional Sales Manager
Treasury Management
704.383.4149| paul.uher@wellsfargo.com
© 2014 Wells Fargo Bank, N.A. All rights reserved. For public use.
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