MasterCard MasterPass -shopping with speed, security and simplicity

Page 1October 2, 2013

Online fraud is still a big problem and as long as the number of online shoppers continues to grow, so will the

number of fraud cases. According to the European Central Bank there were 7.9 million cases of fraud with a value

of 1.16 billion euros in 2011 of which 56% took place in e-commerce.

European Merchant Services organizes the EMS RISK EVENT annually for retailers who are active in e-commerce

and multichannel. It is an excellent opportunity to increase your knowledge in the field of online fraud, risk

management and advanced fraud prevention and detection tools. We help you to stay ahead of online fraudsters

and to protect your online business by sharing the knowledge and experience of our fraud and risk experts, our

customers and our partners.

Do you want to attend next year’s EMS RISK EVENT?

Please contact the EMS Marketing Department at T +31 20 660 3054 or send an email to

[email protected]. For more information visit www.emscard.com/riskevent

Follow us on:

mailto:[email protected]

http://www.emscard.com/riskevent

https://twitter.com/emscard

https://twitter.com/emscard

http://www.linkedin.com/company/european-merchant-services

http://www.linkedin.com/company/european-merchant-services

MasterPassTM: Shopping with Speed, Security and SimplicityEMS Risk Event 2013

Okke Mönking, Business Development

©2013 MasterCard.Proprietary and Confidential

Smart Devices Are Transforming Consumers’ In Person and Online Shopping Behaviors

1 Yankee Group quoted by Zach Miners, IDG News Service,“Panel: Mobile payments could reach $1 trillion

by 2015”, 7 Feb 2013.

2 Monetate, “Ecommerce Quarterly EQ3 2012”, 16 Nov 2012.

3 JiWire Survey, “Which of the following have you done on your mobile device while shopping in a store?”, Q3

2012.

USD 1 Trillion Projected Payments via

mobile devices by 20151

61.5% to 64.2% Cart abandonment rates grew from

Q3 2011 to Q3 20122

49%Consumers who use

mobile phones to comparison shop

while in store3

USD 2.9 Trillion Projected Payments via

mobile devices by 20164

Consumers use smartphones

“to place items in shopping carts

but prefer to switch to PC or laptop

to complete their purchases.”5

19%Consumers who completed their

purchase via mobile devices

while in store6

4 Yankee Group, “The New Mobile Economy Opportunity Will Be Worth US$3 Trillion by 2016”,

26 Oct 2012.

5 eMarketer, “Retailers Rethink Shopping Cart Abandonment”, 4 Feb 2013.

6 JiWire Survey, “Which of the following have you done on your mobile device while shopping in

a store?”, Q3 2012.

October 2, 2013Page 4


Retail Sales Are Shifting to Smartphones, and Merchants Need to Be Prepared

T A B L E T U S E R S

25% 22% 9%of mobile retail purchases are currently made through tablets3

of U.S. tablet users spend

of U.S. tablet users spend

$50 $100or more per month on their devices4

or more per month on their devices4

2011 2012

Percent of top 450 Internet retailer sites

optimized for mobile phones2

37% 95%

1 Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2011–2016 February 14, 2012 (Figures in legend refer to traffic share in 2016.)

2 Acquity Group, 2012 M-Commerce Audit Summary, Q3 2012.

3 Javelin Strategy & Research, “Mobile Payments Hit $20 Billion in 2012: Tablets Are Key to a Successful Retail Strategy”, September 2012.

4 ABI Research, Jan 28, 2013.



Consumers Want Easier, More Secure Payment Options Wherever They Shop

23%of customers abandon shopping cart when asked to register2

Top reasons online consumers abandon their shopping carts1

Improving the consumer experience can impact conversion rates³

• Online security concerns

• Web site forms take too long

• Enforced account creation before purchase

65%of online retailers reported improved conversion rates due to site testing, improved checkout procedures, and other enhancements³

1 IBM Coremetrics Benchmark, ”Cyber Monday Report 2011.”

2 Forrester Research, “Understanding Shopping Cart Abandonment,” May 20, 2010.

3 Forrester Research, “The State of Retailing Online 2011,” September 2011.


IntroducingMasterPass


MasterPass: Shop with Speed, Security and Simplicity on Any Connected Device

Partner-Hosted WalletsPortal for partners to connect their digital wallets

• Enables them to leverage MasterCard’s checkout,

authentication, and fraud reduction services

• Allows their customers to pay wherever MasterPass is

accepted

MasterPass Checkout ServicesGlobally integrated acceptance—both in store

and online

• Enables acceptance of electronic payments across

multiple channels—whether online or, over time, at POS

• Provides speed and convenience to eCommerce and

mCommerce Web sites

• One button, many wallets―saves space on

the checkout page

MasterPass-Hosted WalletsMasterCard-hosted wallets (white label and

proprietary) store all payment and shipping

information in one convenient, secure place

• Easy integration

• No need for consumers to re-enter their information

• Enables banks, merchants and partners to white label

their own wallets

• Fraud-reducing security measures



2.

Shop

4.

Payment

Type

5.

Payment

Details

6.

Shipping

Information

7.

Billing

Information

8.

Sale

Completed

3.

Checkout

1.

Search

and

Discover

SECURITY

CONCERNS

PRIVACY

CONCERNS

TOO

MANY

STEPS

!

!

!

Delivering a Streamlined Consumer Checkout Experience

No need for merchants to request or consumers

to re-key card details, including CVV2/CVC2/CID, shipping

address, billing information

Optimize the Checkout Experience

SPEEDProvides a swift, seamless,

consistent checkout experience

across all channels—computer,

tablet, mobile—and, over time,

will extend to POS and offer

value-added services

SECURITYMulti-tiered security helps

minimize fraud and protect

consumer data

SIMPLICITYStreamlines checkout process

and reduces the number of steps

to make a purchase



MasterPass

MasterPass

C O N N E C T E D W A L L E T S

Checkout with

MasterPass

Partner

Wallet

Enabling

Consumer

Choice

Partner

Wallet

AnyBank

AnyBank

MasterPass

A C C E P T I N G L O C A T I O N S

Checkout at

point of sale



Convergence of Buying Contexts –Creating Compelling Shopping Experiences*

STANDALONE ONLINE

Utilize cloud checkout services

for online shopping experience

“IN STORE REMOTE”

Utilize cloud checkout services for

in-store clienteling experience

Shopper’s Device

AT HOME IN STORE

Store Device

STANDALONE IN STORE

Utilize proximity checkout services

for in-store, point-of-sale experience

“CHIP ONLINE IN STORE”

Utilize cloud + SE services for

in-store clienteling experience

Shopper’s Device

IN STORE

Store Device

Shopper’s Device

IN STORE

( A )

C O N V E R G E N C E

( B )


( C )


* Proposed MasterPass convergence capabilities are currently under development.

MERCHANT LOGO

MERCHANT LOGO

MERCHANT LOGO

Store Device




MasterPass merchant services:Supporting merchant loyalty efforts while enabling fast, secure purchasing online, in-store and on-the-go

SecurityEnhancing security for shopping in the digital age.

• Support for 3D Secure security protocol within wallet for reduced fraud

• Text message purchase verification during checkout

LoyaltyDriving consumer loyalty and spending with our merchant partners.

Omni-channel

Future*

Supporting new shopping experiences at home, in-store and on-the-go.

• Suppression of shipping addresses for digital goods

• Storage & passing of loyalty cards/numbers

• Gift card giving andusage as payment option

• Offer targeting & redemption

Future*

• Embedded mobile app checkout capability

• Scan-to-pay, Tap-to-pay and other payment solutions

• Support for global shipping addresses

• Secure card provisioning & transaction risk detection capabilities

* Future planned services subject to change.

• Bank log-in credentials

• Support for Private Label cards as payment option

• Mobile optimized checkout for easy mobile-web shopping

• Fast and secure checkout online

• Framed checkout within merchant mobile app


MasterPass Flag and Transaction Flow


Changes Required to Support New Data Value – MasterPass Flag

MasterCard implemented system changes to

support MasterPass that included a new data

value to identify MasterPass transactions:

• A new data value identifies MasterPass transactions in the

authorization and clearing messages

• The new data value is generated by the MasterPass system

and passed to the merchant to be included in the authorization

request

• Acquirers will need to work with their merchants and gateways

or Service Providers to ensure the new data value is passed

properly

• Support of this new data value is mandated for both issuers

and acquirers who choose to accept MasterPass transactions

• Note: On August 15, 2012, a release clarification outlined a

change to the MasterPass flag and increased the field size

from one byte to three bytes

KEY DATES:

MasterCard implemented the new

data value changes following this

schedule:

DOCUMENTATION:

• Technical Release Bulletin:

1 June 2012

• Operations Release Bulletin:

13 June 2012

• Release Clarification:

15 August 2012

EFFECTIVE DATES:

MASTERCARD CORE RELEASE

SCHEDULE

• Dual Message System (Clearing):

12 October 2012

• Single Message System:

12 October 2012

• Dual Message System

(Authorization): 6 November 2012

October 2, 2013October 2, 2013Page 14


C U S T O M E R G A T E W A Y A C Q U I R E R I S S U E R

SEND PURCHASE

DATA

SELECT ITEMS TO

PURCHASE

SEND PURCHASE

DATA

SUBMIT AUTHORIZATION

1 3 4 5

* Standard transaction flow

Regular & MasterPass Transaction Flow

C U S T O M E R M E R C H A N T G A T E W A Y A C Q U I R E R I S S U E R

ENTER DELIVERY ADDRESS

SEND PURCHASE

DATA

SELECT ITEMS TO

PURCHASE

SEND PURCHASE

DATA

SUBMIT AUTHORIZATION

1 2 3 4 5 6

M E R C H A N T

M E R C H A N T

SELECT PAYMENT METHODSEND

PURCHASE DATA

SELECT CARD TYPE &

DELIVERY ADDRESS

2

ENTER CREDENTIALS

LOGIN



User Experience: Transaction Authentication

Basic Check-Out

Guaranteed Check-out with SecureCode

Guaranteed Check-out with Partner Log-in

Issuer validation of log-in

credentials

Partner Bank

Partner

Bank



MasterPass Experience: eCommerce


Consumer Checkout:Merchant Shopping Cart

After clicking the BUY

WITH MasterPass button

on the merchant site…



Consumer Checkout:1. Wallet Login Page – Recognized User

User can select the

USE ANOTHER

WALLET tab to view

additional wallets

1



Consumer Checkout: 2. Choose Card and Shipping Address

Consumers validate

their default card and

shipping address, and

click REVIEW YOUR

ORDER

2



Consumer Checkout: 3. Choose Card and Shipping Address

If opted-in, consumers

are prompted to enter

a 4-digit SMS code

prior to completing

checkout

3



Consumer Checkout:4. Place Order

QTY Product Description Delivery Options Price Total

1

Nathan Hydration Bottle

With Clipless Cap

Item#: 4026N

SKU: NS 4026N

Size: 22oz.

Ships from Warehouse Alpha

Shipping Method | Edit

UPS Ground (4-6 Days)- $7.99

PLEASE NOTE: Shipping time refers to days in transit beginning

the day after your order ships. Most orders ship within 1-2 days.

Only business days apply (M-F).

$5.95 $5.95

Edit

First Name Last Name

123 Speedy Secure Path

Simplicity, NY 10000

Edit

First Name Last Name

123 Speedy Secure Path

Simplicity, NY 10000

Edit

Card Number: ************0008

SafeShoppingGuarantee

ALL INFORMATION IS ENCRYPTED

AND TRANSMITTING WITHOUT RISK

USING THE SECURE SOCKETS LAYER

(SSL) PROTOCOL.

4

Total: $13.94

Tax: $0.00

Shipping: $7.99

Subtotal $5.95

PLACE ORDER

(click only once)

Information is passed

back securely to the

merchant site and

consumer returns to

merchant site to

finalize purchase



Mobile

MasterPass Experience:


Mobile Checkout: Consumer Clicks BUY WITH MasterPass to Reach Sign-in Page

After clicking the BUY

WITH MasterPass button,

the consumer is brought

to the wallet selector page

1 2 3

Users can access the

wallet selector by clicking

the USE ANOTHER

WALLET flyout menu

PARTNER

LOGOPARTNER

LOGO

PARTNER

LOGO



4

Mobile Checkout: Choose Payment and Shipping Details, Complete Checkout

Masthead can be

customized with PARTNER

logo and colors

After selecting card and

shipping address, consumer

returns to merchant page to

complete order

5

6

PARTNER

LOGO

PARTNER

LOGO

PARTNER

LOGO


Okke Mönking

Business Leader Acceptance

Tel: +31-6-46884990

Email: [email protected]

mailto:[email protected]

MasterCard MasterPass -shopping with speed, security and simplicity

Economy & Finance

mobile payments

mobile devices

mobile phones2

mobile retail purchases

online shopping behaviors

field of online fraud

new mobile economy opportunity

cases of fraud