At the grocery store the other day, I paid using ApplePay. With just a tap of my iPhone and a chipper (payments humor!) musical chime, my payment was accepted. A few seconds later, after touching a few buttons on the payment terminal screen, I was walking out the door. What just happened? I experienced two things: a frictionless digital payment, and a mild customer experience victory.*
Bringing down, or rescuing, the house
Best of all, I wasn’t dealing with the “swipe or dip” decision point, and I certainly wasn’t putting myself at risk for knocking out the store’s POS devices. (Check out the blog in the tweet below for another payment expert’s hilarious, deeply personal tangle with EMV.)
Based on my newfound confidence from the grocery store, I then marched into the local CVS pharmacy, brandishing my iPhone near the POS terminal only to hear the cashier say, “Oh, are you trying to use ApplePay? It doesn’t work.” A second later I heard the telltale chipper musical chime (more comedic genius!) and triumphantly declared, “I think it works!”
With complete astonishment, the cashier looked over at his co-worker and said, “Hey, this guy just fixed our ApplePay!” Seriously. Payments truths are stranger than fiction. I’m now a certified ApplePay Jedi Master with “your ApplePay will now function properly” Jedi mind tricks.
Executing mobile payments at scale
As you can see, digital payments, increasingly conducted via mobile payment mechanisms like ApplePay, AndroidPay, ChasePay, CakePay and myriad others, present a big challenge: how to keep customers happy by enabling instantaneous transactions, while keeping a lid on fraud. Keeping customers happy, and letting them pay in the way that is most convenient, are the key growth drivers for mobile payments.
The FICO® Falcon Fraud Platform plays a critical role in enabling frictionless, fraud-free digital payments. Falcon protects two-thirds of the world’s card-based payments from fraud. Increasingly, cards are the underlying payment mechanism for all manner of digital payments. Falcon performs real-time analysis of fraud risk in 40-60 milliseconds (four to five times faster than the blink of an eye); given the additional machinations involved in executing mobile payments, the convenience at which my ApplePay transaction was approved (and all digital transactions, really) is pretty amazing.
Falcon is able to analyze digital payments at scale due to several innovations pioneered by FICO. These include:
- Multi-payment detection with multi-layer profiling: The Falcon platform is a single platform for real-time fraud decisioning and risk-ranking across all payment types. When evaluating a digital payment for potential fraud, Falcon incorporates available information on mobile payments, digital wallets, e-payments, credit and debit cards, and money transfers. Its patented transactional profiling captures behavioral patterns at the levels of payment instruments, accounts and customers. This big-picture view provides invaluable analytic fodder, including the provisioning aspect of setting up wallets.
- FICO Global Intelligent Profiles: These analytics use advanced algorithms to select currently risky entities, as well as to provide an ecosystem-wide view. Global Intelligent Profiles track the historical behavior of transactional entities that may be associated with any number of customers, such as ATMs and merchants associated with the most fraud. This information is stored in memory for instant access by fraud analytics.
* I say a “mild” victory because I’m still rather underwhelmed by all the button-pushing that needs to be done with ApplePay. I’m not quite ready to leave my George Constanza wallet at home.
Follow me on Twitter @FraudBird