MasterCard and Visa now account for 86 per cent of all payment cards in Europe, with €9 out of €10 reportedly spent on one of their payment cards – the highest share of any global region, but as the likes of PayPal and Apple grow in popularity the payment market, MasterCard and Visa need to make sure they stay ahead to keep their market share high.
MasterCard recently announced its ‘zero liability’ promise to increase and expand the minimum standard for consumer protection against unauthorised transactions across the globe, with one single rate, increasing the minimum standard for consumer protection against unauthorised transactions.
While the benefit of this scheme is clear – less liability for the cardholder will ultimately equate to higher market share for MasterCard – there is an underlying issue lurking that could taint the promise by unintentionally causing friendly fraud.
In the US, this type of cardholder campaigning has continued despite the threat it poses to the industry, largely because the victims are merchants who live in fear of getting too many chargebacks and hesitate to confront these issues head on with their consumers or banks.
MasterCard is playing smart by marketing this angle in Europe, where it is gaining popularity despite additional competition. Providing it puts equal emphasis on educating merchants about ways to defend themselves, the idea of “zero liability” doesn’t have to end badly.
Visa is also working hard to keep its market share, and revealed over 6 million registrants to its Visa Checkout service, with sign-ups increasing by more than 92% since the beginning of 2015, and big-name partnerships with the likes of Taco Bell and Barnes & Noble. The momentum of the response from merchants and consumers speaks volumes about Visa’s mission to make payments easier.
However, the platform for fraud grows hand-in-hand with the increasingly easier online payments methods available. Despite Visa Checkout’s high level security measures, the increasing sophistication of online criminals means that fraud managers need to work harder than ever before to keep consumers safe. Fraudulent transactions are varied, which makes it more difficult to spot them among legitimate activity.
Chargeback levels are at risk of increasing, thanks to these more convenient payment platforms, and while they can certainly prove useful for consumers who have been defrauded, fraudulent chargebacks can still hit merchants in the form of friendly fraud. Merchants should not be discouraged from implementing easier and quicker payment schemes, especially those that help to mitigate the chargeback risk. Ultimately, it is merchants who support specialised fraud prevention strategies and chargeback analysis tools that will save time and money in the long run.
