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Important Dates
February 22-26
OneBridge will be attending the 2009 CUNA Governmental Affairs Conference with Share One in Washington, DC.
Additional Info
March 8
Daylight Savings Time
March 15-17
OneBridge will be attending the Association for Financial Technology (AFT) Spring Meeting.
April 2-4
OneBridge will be attending the Tennessee Credit Union League Annual Convention and Expo in Gatlinburg, TN
Additional Info
April 17
System Maintenance/Visa Spring Business Enhancements will be implemented. Authorizations will not be impacted. |
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Letter from the President
Dear Clients & Partners:
Welcome to 2009! As with most of you, we at OneBridge are looking forward to a very successful and fruitful 2009. In light of the 2008 market conditions and its effects on just about every financial services related company, I am pleased to share that OneBridge had a very positive 2008. I would like to highlight some of those positives in this edition of the Touchpoints Letter from the President.
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1. Welcomed new client relationships with the additions of Service 1st Credit Union, L G & W Federal Credit Union and United Health Credit Union.
- Delivered a new fraud detection product with the addition of Proactive Risk Manager (PRM). PRM is a powerful solution to fight fraud. It combines the power of expertly defined rules with neural network scores for fast, accurate and flexible responses to the evolving nature of issuer card fraud. It provides two new risk management functions: PRM Scoring Engine and Analysis & Review.
- Continued to expand our core processing interface relationships by adding 2 new core relationships (Harland's UltraData and Jack Henry's Symitar). As I've mentioned in the past, this initiative continues to be crucial to the ongoing success of OneBridge, providing our clients and prospects with additional choices in the market, and not limiting them to only certain core interfaces.
- Expanded our product suite with the launch of our PIN Debit & ATM driving services, introduced our "Contactless" Card Program utilizing the Visa payWave system and added additional features to our Point2Point Rewards program.
- Completed our Indianapolis data center move to an expanded secure facility. This improved our disaster recovery capabilities and regulates our power monitoring system.
These are just a few of our 2008 highlights. OneBridge is well positioned for 2009 and beyond with our dedicated team of professionals focused on maximizing the value of all of your card-related payments programs. It is our people that separate us from the competition. With our size, we not only have the ability to be nimble, but also continue to provide you with the service you have come to expect, and service you do not get from many of the larger companies in the industry.
In closing, I would like to say a large "thank you". I appreciate your continued support and look forward to 2009. It will be a great year for us all!
Sincere regards,
Jim Kern
President
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With the Help of a Good Processor, Anything is Possible
By Ken Newberry, President/CEO, L G & W Federal Credit Union
"A lack of committed resources"......I'm sure you've heard that before. It was the main reason I sold my credit card portfolio in 2006. So, in that same year, after moving to my new credit union (LGWFCU), where they didn't have or have ever offered a credit card, I found myself asking the question... is it possible?
With the help of OneBridge, I decided an in-house credit card program was possible. After my previous experience and due to our small size, I was concerned whether we had the staff capacity or operational expertise to handle an in-house credit card program. Furthermore, the credit card processors basically had no interest in setting up a program for us. So, it was either do it in-house or continue to not offer the product at all. After discussing the project at length with Andy Hayes, Vice President of Sales at OneBridge in addition to the references he provided, he convinced us that with OneBridge's help the program was very do-able
without a significant increase in staff or taking big risks on the operational side.
I have been through numerous start-up programs and conversions, and I can honestly say that this was by far the easiest and smoothest start-up I have ever experienced. The thorough, efficient and knowledgeable staff at OneBridge led us through the entire project and it was completed on-time and successfully. I have heard the terms "seamless and transparent" many times from salesmen before, and it is NEVER that way. However, if I had to describe the OneBridge process to a prospective client, I would feel comfortable using those terms.
The operational side of the program is running smoothly as we were told it would, and we currently manage the program with one person spending approximately 25% of her time. An in-house credit card program is definitely possible! Now, it is up to us with One-Bridge's help to market and grow the program to reach our goals. We look forward to our credit card program becoming a very successful part of our lending product line.
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Counterfeiters Do Not Discriminate
Counterfeit plastic card fraud can happen to any card issuer. Despite merchant efforts in following the proper procedures; fake cards are still slipping through the cracks as fraudsters are becoming more and more crafty and creative at producing legitimate looking cards.
Stopping the fraudulent activity is tricky because typically the authorization is a full swiped card, the CVV is validated and the fraudster signs the receipt. The transaction therefore appears legit.
How to spot a fake
Recent counterfeit activity on OneBridge client BINs became obvious because of the locations of the authorizations and the speed of similar transactions at merchants like grocery stores and electronics stores. Developing strategies and implementing them using OneBridge Velocity Monitoring and Fraud Scout to identify and review suspicious activity was key. Once a trend is recognized as fraudulent behavior, using OneBridge Real-time Authorization Filters to decline transactions that are highly likely to be fraudulent ultimately drive fraudsters away from the BIN.
What you should do
What should you do once you identify fraud occurred with a counterfeit card? Chargebacks can be limited because merchants have typically followed best practices when authorizing transactions on counterfeit cards. Here are a few suggestions to help uncover chargeback opportunities.
- Review reason code 62 in the Visa Operating Regulations, Volume II for specifics on counterfeit cards.
- Check the POS entry mode of the transaction. 05, 07, 90 or 91 are fully read cards and chargeback rights are not available.
- Order a copy of the sales receipt - most insurance companies require a copy.
- No copy received - review reason code 79 for non-fulfillment.
- No signature received - review reason codes 60 or 81.
- Currently, the dollar amount above $75 at an automated fuel pump (MCC 5542) can be charged back to the merchant.
Every counterfeit card case is unique. Get as much information from the cardholder as possible when fraudulent activity has been reported. List cards with counterfeit activity on the OneBridge and Visa exception files with a pick-up response code. If a card is picked up by a merchant and returned to the financial institution with the falsified data it can be submitted for Visa compliance.
However, the most important thing you can do to help combat counterfeit activity is quickly report counterfeit transactions to Visa. Fraud Advices or TC-40's assist Visa in looking at the counterfeit transactions globally, finding a trend that leads back to the exposure, and sharing those conclusions so we can work together in combating future fraudulent activity. Fraud Advices were key in assisting Visa in discovering the recent compromise with Heartland Payment Systems.
Go a step further with the CER ID
Many of our clients have signed up to receive the Compromised Event Reference ID (CER ID), which is a very smart move. It is an effective way to manage cards that have been in a compromised event. Rules can be written using OneBridge Real-time Authorization Filters, Velocity Monitoring and Fraud Scout to handle cards with a CER ID differently than other cards. You can identify and block cards with a CER ID that match a particular scheme such as declining transactions over $150 at grocery stores or department stores while you are preparing to issue a new card. You can monitor for suspicious behavior using Velocity Monitoring and
Fraud Scout and determine whether a new card needs to be ordered. If more than 3 transactions have occurred within a list of suspicious merchant category codes in the last hour, Fraud Scout can call and verify the cardholder participated in those transactions.
In Summary
Review what to do to help determine counterfeit activity, determine if there are chargeback rights and complete fraud advices (TC-40's) on each counterfeit transaction. Utilize OneBridge risk management tools to help eliminate large losses on card present fraudulent transactions.
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OneBridge Client Joins the Ranks of Seven of the Top Ten Visa Issuers
OneBridge client First IB of Indiana will go live in April, 2009, with the payWave contactless feature added to their Visa Check Cards. They are in good company with seven of the top ten Visa issuers offering Visa cards with payWave contactless technology.
Visa payWave is a quick and convenient payment method that eliminates direct contact at the merchant terminal; it's faster and more convenient than cash and as secure as traditional Visa card transactions. By simply holding a Visa payWave-enabled card close to a contactless card reader, consumers can complete a Visa transaction in seconds. There is no fumbling for cash and cardholders remain in possession of their Visa card at all times. Banks have issued millions of Visa payWave cards worldwide.
With consumers increasingly using their payment cards to make small-ticket purchases, contactless payments such as Visa payWave are becoming more and more popular at many merchant locations worldwide. This includes quick service restaurants, gas stations, convenience stores, public transportation and taxis. National merchants already accepting Visa payWave in the U.S. include BP, 7 Eleven, CVS Pharmacy, McDonalds, Taco Bell, Jack in the Box and more.
A number of national merchants are in the process of upgrading point of sale terminals and have announced plans to accept Visa payWave, including Einstein Noah Restaurant Group, BJ's Wholesale Club, Circle K, Office Depot, and PETCO. For a list of participating merchants in the areas your cardholders shop, visit http://usa.visa.com/paywave-merchants/
where you can search by address, city and state, or zip code.
According to paymentsnews.com, the Smart Card Alliance reports that "after two years of fast growth in contactless payments, the verdict is in: Once consumers try contactless, they like it!
And with large issuers including American Express, Chase, Citibank, Wells Fargo and many others issuing contactless cards, the number of users is growing fast." New U.S. consumer research commissioned by the Smart Card Alliance showed nine percent of the U.S. population now has a contactless credit or debit card. Last year the number of open network contactless cards in circulation reached 35 million in 2007, nearly doubling from 19 million in 2006, according to another study from Jupiter Research.
The Alliance survey showed 92 percent of contactless users thought it was both fast and easy. On the whole, these users had positive experiences at merchants too, reporting that 85 percent of cashiers knew how to accept contactless, and 84 percent saw contactless acceptance marks at the point-of-sale. Contactless users are also paying with their contactless cards or fobs frequently, with over 22 percent using contactless payment more than six times per month.
One challenge highlighted by the recent Alliance consumer study was that more communication is needed to reach more consumers. Awareness has grown significantly since 2006, with 25 percent of consumers surveyed now familiar with contactless payments compared to 15 percent in 2006; however, more than 50 percent of consumers still are not familiar with contactless payments. Even in high penetration zip codes nearly half of all consumers are unfamiliar with contactless.
Contactless users are very positive on mobile payments as well. Current contactless users are twice as likely to use a mobile wallet as non-users. The Alliance research showed 43 percent of contactless users were likely to use a mobile device as a mobile wallet, compared to 19 percent of the non-users. Consumers are even ready to switch carriers to get what they want, with 47 percent of contactless users saying that they would switch mobile carriers to gain mobile payments.
Visit the Smart Card Alliance Contactless Payments Council Web page (http://www.smartcardalliance.org) for information, white papers, news and other resources about contactless payment.
For information about how you can add the Visa payWave contactless feature to your credit and debit cards contact OneBridge Client Service via email clientservice@onebridge.com or by phone 800-322-4035, option 1. We will be delighted to help you be among the Visa card issuing leaders and drive up usage of your cards.
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Risk Management Tools: Use Them to Your Advantage!
With the recent compromise announced at Heartland Payment Services and more and more card present fraud being reported, utilizing OneBridge risk management tools has become critical to the success of your card programs.
We have no control over criminal activities so it's imperative to set-up parameters to help identify and stop fraudulent behavior before losses add up and cardholders lose faith in the plastic card payments system.
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"We're
frustrated that even after doing everything we thought possible to protect our members this continues to happen and it seems that for the most part the Credit Union pays the price for merchants and other organizations inability to help in the fight against fraud. The amount of time that goes into filing a dispute only to learn there is no chargeback right and then in turn filing a claim with our bond company but knowing that until we reach our per card deductible and then aggregate credit union deductible we won't be reimbursed is beyond frustrating. OneBridge has been a great business partner through these times, insuring that
they are always at the leading edge when it comes to fraud detection and helping to protect our members. Also, their quick contact with us to inform us of patterns they're seeing positions us to immediately set up filters to stop the fraudulent activity. OneBridge has made managing this process very easy and they truly epitomize the meaning of partnership."
- Jim McCorkle, President/CEO,
Touchstone Federal Credit Union |
It is important to remember that fraudulent activity and schemes are ever changing. Card present counterfeit fraud is a challenge to identify and as soon as a fraudster finds a vulnerable BIN, it can be a scramble to stop them. Testing authorizations followed by MOTO fraud is becoming more prevalent.
Alerting on suspicious behavior in order to identify schemes is essential in stopping the fraudsters. OneBridge Velocity Monitors can alert you on multiple authorizations with a set criteria and assists in narrowing down suspicious activity and finding fraudulent patterns. Monitoring transactions less than $1.00 is also helpful to find test transactions so you can take action on those cards if needed. The strategies you can employ using OneBridge risk management tools are extensive.
A highly successful velocity monitor we use globally is to alert on more than 3 authorizations in an hour totaling more than $150 within a merchant category list that includes grocery stores, electronic stores, department stores, jewelry stores, automatic fuel dispensers, fast food restaurants and drug stores. Criminals tend to take stolen plastic cards to these type of merchants and typically the transactions occur one after the other fairly quickly. Use Fraud Scout to alert your cardholders to the activity and validate the authorizations.
Once a scheme is identified as fraudulent, Real-time Authorization Filters become critical in declining the known fraudulent transactions. Once you know automated fuel dispenser transactions in Texas, for example, are being used for fraudulent transactions put in a filter to decline those authorizations meeting the scheme pattern. Recently a OneBridge client on the east coast began seeing multiple authorizations seconds apart at automated fuel dispensers in Texas and Georgia but once the real-time filters were put in place within a few days the transactions completely stopped. The fraudsters move on once the transactions are declined.
For help with determining the best risk management tools for your Credit Union, please contact OneBridge Client Service.
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