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Q1 2021
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7 Minutes

G+D: Securing Everyday Digital Payments

Forrester researchers predicted that online retail would grow 18.5% in North America in 2020, reaching 20.2% overall penetration. As online buyer behavior will continue to strongly increase, online merchants need to adapt rapidly to cater the customers, and getting the payment offering right is crucial in order to offer a safe and secure online shopping experience.

Securing everyday digital payments: How secure are your online payments?

Ok, we are getting tired of hearing about Covid-19, and we all know the drill with lock downs, social distancing and all. Now we just want to focus on getting back to some sort of normal, even though that normal most probably will look very differently as we know it. One big change throughout 2020, that most probably will stay, is how e-commerce has been booming. And still is. Digitally savvy online shoppers have easily moved from physical stores to online, not only for shopping shoes and clothes or streaming film and music. But also, to order food, gardening utilities and beyond. But how secure is it to shop and pay online?

Forrester researchers predicted that online retail would grow 18.5% in North America in 2020, reaching 20.2% overall penetration. And when looking back at the Christmas season, we noticed it was not only the usual online shoppers ramping up their game. We also saw a strong demographic shift, with the Boomers going online to buy and send gifts for the Holidays. As online buyer behavior will continue to strongly increase, online merchants need to adapt rapidly to cater the customers, and getting the payment offering right is crucial in order to offer a safe and secure online shopping experience. Cause fact is this new customer group will be an easy target for fraud and scams. And here the payment ecosystem needs to step up and educate about the risks when it comes to online shopping!

As a solution to secure the online shoppers, and still getting the conversions at the checkout, Jukka Yliuntinen, Head of Digital Payment Solutions at Giesecke+Devrient (G+D), strongly promotes Card-on-File (CoF) network tokenization of payment card credentials [webinar].

eCommerce in Times of Covid-19

The pandemic has driven retail online, to fulfill social distancing requirements. 48% more US consumers used digital channels to shop during the first months of the crisis than before. 1/5 of consumers in Asia Pacific went online for the first time. E-commerce sites have undergone an unprecedented global traffic increase, surpassing even Holiday season traffic peaks. Overall, they have generated almost 22 billion visits (June 2020), up from 16.07 billion global visits (January 2020).  A survey conducted by Dynata for Redpoint Global, found nearly two-thirds of the adult shoppers surveyed planned to do all their Holiday shopping online.

In major geographies, overall consumer payments revenue is largely driven by spending-dependent streams, especially cards. These streams account for between 66 % and 86 % share, with the rest driven by liquidity and account-based revenue, Jukka says.

"In major geographies, overall consumer payments revenue is largely driven by spending-dependent streams, especially cards"

“Some spending is expected to move to e-commerce where possible, but less developed e-commerce sectors will be hit significantly—some by more than 50 %, initial data suggests. Securing these transactions not only delivers increased revenue. With CoF network tokenization you will also eliminate risk and serve your customers with a happy shopping experience.

Download the Use Case for Merchants and PSP's For Enabling Secure Card-On-File E-commerce

The rise of tokenized digital payments is also something we at G+D notice when looking at own statistics: ”Our numbers not only confirm this trend, but also are proofing an even higher impact based on the increase of customers going digital, as this is hitting all-time-high records in an accelerated pace!”, Jukka says.

”Our numbers not only confirm this trend, but also are proofing an even higher impact based on the increase of customers going digital, as this is hitting all-time-high records in an accelerated pace!”

But how can a customer have control over who has access to this payments data? What if someone gets hold of card numbers and CVV codes, and misuses the information?  Recent reports show that phishing scams are on the rise, targeting consumers primarily through email, secondarily through text messages but also thru reach out via direct phone calls. Actually, as many as 27% of consumers have been hit with pandemic-themed phishing scams, according to a survey done by TransUnion.

"As many as 27% of consumers have been hit with pandemic-themed phishing scams"

How to avoid phishing scams and fake web shops

If receiving an e-mail, make sure to check out the sender. If you are unsure or if something feels strange, if there is a lot of spelling mistakes or attachments to open, assume the e-mail is fraudulent and remove it immediately.

  • Don’t open attachments and don’t click on links from unknown senders.
  • If you get contacted via phone or direct messages on social media or such, apply the same as for an e-mail.
  • And never ever hand put your card details, codes, passwords to a third party!
  • To see if an online shop is fake, click on the imprint for legal information. If this is missing out, the shop is a no go.
  • Google the web shop’s name and look for reviews. Or even check-up the shop on Trustpilot and alike to learn more about the online shop.
  • Does the shop have certificates, proofing it is trustworthy? Click on the logos: If the certificates are real, they also link to the certifying organization for further information.
  • When it comes to pay, look at the checkout and validate how the payment is processed. If done via renowned payment network providers, the checkout process is most likely secured. But if suddenly you should send your card details via e-mail, or fill out a form, or pre-pay in any way, abandon the process as this might be a fraud.
  • And finally, use your common sense: If it is too cheap, too easy, too many logos, too many misspelled words, it is probably too good to be true.

One attempt to prevent online scams is made from the EU commission, who has met and urged online merchant platforms to join forces with consumer protection authorities on tackling online consumer scams. Which are good initiatives for sure. But there are ways to include the card holders too, and let the consumer take ownership of its payment credentials.

Jukka explains how this is done: “With our latest innovation, our Token Cockpit, we provide the end-customer a token management tool integrated for example in the mobile banking app, fully controlled by the end-customer itself. In this cockpit, the customer has a full overview of where the payment credentials are tokenized, and can also enable and revoke tokenized cards, for total control. This empowers end-user to deploy the mobile phone as a remote controller of payment cards for all digital channels. Then the Cockpit provides same enablers to Issuing banks in terms of web-UI, for customer support purposes.”

What is Network Tokenization?

Tokenized e-commerce payments are nothing new. And many merchants use these as proprietary solutions. Thus, these are vendor dependent and are lacking some valuable features. 

Proprietary security tokens are designed to protect sensitive information within a merchant’s database. Thus, sensitive data is vulnerable throughout the entire payment processing chain, and not only in the merchant’s “vault”. This makes the data vulnerable, and poses for fraudsters to take hold of the same, which is shown in the rapid growth in card-not-present (CNP) fraud.

Network tokenization, on the other hand, protects the card details are throughout the entire transaction lifecycle. Also, network tokens can be restricted in their usage, for example, to a specific device, merchant, transaction type or channel. And since network tokenization protects card details throughout the entire transaction lifecycle, issuers treat these types of tokenized payments as more secure than non-network tokens. 

For merchants this can be very beneficial, limiting fraud prevention spend, increasing authorization rates and growing customer retention and loyalty.

But at the end of the day, when it comes to pay securely online, the whole ecosystem consisting of payment service providers, online merchants, card networks, issuers and the consumers themselves need to take control to prevail over the fraudsters [Webinar].

“To gain success in this increasingly complex arena, online merchants for instance will need to work with the right partners. G+D offers end-to-end solutions for e-commerce and tokenized payments, enabling security with CoF network tokenization and a state-of-the-art customer experience for increased conversion rates.” Jukka continues: “For banks to offer a complete security solution, allowing the customers to have a transparent and fully control of their payments data, the Token Cockpit is a sophisticated way to bypass fraudsters in getting hold of and misuse card details: The customer can easily monitor where the tokenized credentials are afoot, and in a jiffy revoke or momentarily disable the same if wanted. Banks eliminate the risks of costly security breaches, the customers feel confident in how their payments are in use, and the customer relationship is strengthened. And the right merchants receive payments at the checkout. A win-win for everyone!” 

Author: Jennie Johansson Carnhamre

About Jukka Yliuntinen:

Jukka Yliuntinen, Head of Digital Solutions at Giesecke+Devrient, is well versed in identifying and delivering high performing, innovative, and business generating payment solutions for the industry, leveraging on his over 20 years’ experience in payment and identity technologies. 

Jukka is also driving industry initiatives within the Mobey Forum, where he is co-chairing their Digital Identity Expert Group. And as an expert in his field, he is continuously contributing to papers as well as giving keynotes on numerous conferences world-wide on digital payment and identification topics.

About Giesecke+Devrient (G+D):

G+D technology is unconsciously used by billions of people every day! With more than 700 global Banks putting their trust in G+D and our offerings, we enable secure and convenient transactions for everyday usage (hyperlink: https://mobile-security.gi-de.com/futurebanking). Our safe payments technology, elegantly combined with smooth customer experiences throughout the whole customer journey, secures the daily life use of financial services. And also creates customer obsession for our clients!

Curious to learn more about G+D? Check out our Podcast episode with G+D! 

In the sixth episode of our new podcast “Voices In Payments” our host, Diederik Klopper discusses How to innovate through crisis times as a FinTech and the acceleration of payments developments with Barnabás Ferenczi, Head of Strategy & Marketing, and Rüdiger Vogt, Head of Payments 4.0 at G+D (Giesecke+Devrient)

With over 160 years of experience, G+D is actively helping shape one of the most important trends of the future: security. The long-established technology group creates confidence in global payment transactions, modern communication, digital identities, and data security, by providing innovative products and solutions.

Listen to this Voices In Payments Podcast Episode to find out:

  • The key factors for innovation through time as a FinTech
  • How to maintain a high level of innovation through times of crisis & uncertainty
  • How to shift your focus towards solving day-to-day issues during crises whilst maintaining the long-term vision of the company
  • The importance of a customer-centric approach
  • The most significant developments in local markets that are expected to have a profound global impact
  • How China’s Payment Ecosystem Shapes the Future Roadmap
  • New payment propositions that will come in and shake up the market in the foreseeable future
  • And more
About PaymentGenes:

The PaymentGenes FinTech magazine"Voices In Payments" Podcast are initiatives to positively impact the payments community, by educating and connecting the market with vertical-specific industry expertise.

PaymentGenes Empowers Business growth by providing expertise-driven Recruitment, Contracting, Consultancy Services. These services all resolve and intersect around payments. Get in touch and learn more about how we can help your business here.

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