Wednesday, April 27, 2016

Card Forum 2016: Payment Industry Insights

By: Robert Jarosinski, Sr. Consultant, Risk Management, CUNA Mutual Group

Los Angeles in mid-April may be most remembered for Kobe Bryant’s famous last games. But, celebrities weren’t the only ones filling the streets.

Payment industry experts also came together for Card Forum 2016, a premier event that unites the brightest minds in finance and technology. Julie Walser, Loss Manager and Bank Secrecy Act Officer, UW Credit Union. I had the privilege to attend, speak and emcee at the Credit Union Summit portion of the event.

I gained these insights from the event:

EMV is changing the fraud landscape – in a great way.

There‘s been a lot of curiosity on how EMV implementation would play out on the chargeback liability shift front.

One credit union has seen some dramatic results so far: Since implementing EMV, Leanne Phelps, SVP, Card Services, State Employees Credit Union, reported a 48% decrease in fraud and recovery of 70% of fraud they've had through chargebacks.

Stephanie Ericksen, VP of Risk Products, Visa Inc., also shared some good news. “Of the top 25 merchants who've turned on EMV, they've seen an 18% decrease in fraud compared to an 11% increase for those who haven't."

Innovation is the key to success.

In order to remain relevant to consumers, we must innovate – as an industry and  a country.

As an example, Brian Ziff-Levine, Director of Cards and Payments, First Tech FCU, shared how they’re innovating by becoming one of the first to pilot selfie pay for CNP transactions.

Adapting new technology through innovation also applies on a national level. Today, the United States payment industry is highly regulated and utilizes many outdated systems out of dependency, which limits its adoption of new payment systems.

In contrast, Kim Norland, CEO, Design Success, and creator of Money Amigo, cited the Netherlands as a country that recently adopted a dramatic plan to move to payment innovation.

“Almost 90% of transactions are digital in the Netherlands,” said Norland. “This was made possible by the government converting all notes to coins. Honestly, who wants to carry $20 worth of coins? You don’t need much more motivation than that.”

But, innovation isn’t necessarily tied only to the creation of products and adoption of new technologies; it also means evaluating outcomes of past changes and seeking answers and means of improvement.

For example, mobile wallet solutions are facing low adoption and use rates – but why? According to Margaret Weichert, Principal Financial Services Performance Improvement, EY, a lack of opportunities for women in strategic payment innovation roles could be the culprit. Women make 80% of today’s retail purchases, but how many women were at the table in developing the strategy for the mobile wallet in the marketplace today?

Clearly, the payment industry – including credit unions – needs to reevaluate opportunities for innovation when it comes to future development.

We look forward to continuing to report on updates within the payment industry, participating in future forums like PayThink 2016 and Card Forum 2017 and helping credit unions mitigate payment risks. Stay tuned for future insights.

CUNA Mutual Group Bond policyholders receive exclusive, complimentary access to more detailed information about risks and mitigation tips regularly as part of our RISK Alerts, the Protection Resource Center and our individualized credit union consultations. To ensure you’re receiving the latest resources, register for Protection Resource Center access within our My Services webpage or contact a Risk Management Consultant at 800.637.2676.