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Stripe Acquires Touchtech

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Re: Stripe Acquires Touchtech

#21

Post by TazeTSchnitzel »

scrollaway wrote: post #6
0xffff2 wrote: post #3

Earlier quoted context omitted.

Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.

In this case, government regulation makes SCA required; but in Europe most banks already practiced SCA. For free. Here payment card fees are also far far lower because we don't have a credit card mentality of always seeking that tiny percent cashback, so these are much rarer in Europe. We also have banks themselves competing with Visa and MasterCard, for example in Belgium with bancontact. The banks offer merchants e…

What's interesting to me is that, in my experience, it seems that SCA not being used is more of a merchant than a bank problem. My previous bank (NatWest in UK) and my current bank (Nordea in SE) both support it, but a lot of merchants, especially UK ones, don't bother, which undermines the system.

Re: Stripe Acquires Touchtech

#22

Post by TazeTSchnitzel »

arnvald wrote: post #8
m11a wrote: post #4

Earlier quoted context omitted.

Reduced fraud does have benefits to merchants either way by (a) less income lost in chargeback fees, and (b) time saved not having to fight chargebacks.

There's more to that. Anti-fraud mechanisms that require additional action on user's side, lower the conversion rate. For example 3DSecure mechanism redirects customer to another site where user has to put a number received in a text message. My phone is in another room upstairs. I cancel the payment and tell myself I'll do it later. Of course I might do it, but I might forget about it or change my mind. Another exam…

3DSecure can be implemented well, but most banks are not known for their slick online banking experiences sadly.

Re: Stripe Acquires Touchtech

#23

Post by andy_ppp »

TazeTSchnitzel wrote: post #18

It's quite exciting that stolen payment card details will lose most of their value for Internet purchases in the EEA soon. Long overdue I think, it's practically a backdoor to the whole Chip and PIN security system. (Though so are transactions with signature or magstripe, but those are also slowly being tackled…) My main bank account is with Nordea, a big Nordic bank, one of Sweden's big four. They are currently quit…

Why isn’t Verified by Visa mandatory everywhere? Isn’t that enough?

Re: Stripe Acquires Touchtech

#24

Post by TazeTSchnitzel »

andy_ppp wrote: post #23
TazeTSchnitzel wrote: post #18

It's quite exciting that stolen payment card details will lose most of their value for Internet purchases in the EEA soon. Long overdue I think, it's practically a backdoor to the whole Chip and PIN security system. (Though so are transactions with signature or magstripe, but those are also slowly being tackled…) My main bank account is with Nordea, a big Nordic bank, one of Sweden's big four. They are currently quit…

Why isn’t Verified by Visa mandatory everywhere? Isn’t that enough?

Verified by Visa with an appropriate implementation is one way to fulfill the requirement for Strong Customer Authentication. All Visa cards in the EEA will have to either implement Verified by Visa in a compliant way, or use some other method such as a randomised CVC you can find out via a mobile app.

Re: Stripe Acquires Touchtech

#25

Post by saas_sam »

loceng wrote: post #2

As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?

Profits equal the difference between what customers are willing to pay for a product/service minus what it costs to provide that product/service. When you find a new way to deliver something valuable at a lower cost -- meaning less time & material resources -- you enjoy profits. Profits are then used to do things like hire people, invest in tech improvements, and acquire companies like Touchtech. Without profits, people would pay for things at cost which sounds great in the short term, but would result in no money left for further improvements much less incentivizing hard work, which is very bad in the medium and long terms.

Re: Stripe Acquires Touchtech

#26

Post by clintonb »

jatsign wrote: post #16

...well crap. Time to update my side projects to handle this new flow. I wasn't aware this was even coming. Looks like there are a lot of exemptions (my side project costs customers less than 30 euros), but it's ultimately up to the customer's bank. I guess I'll move to Stripe checkout instead of my custom form.

This should help: https://stripe.com/sca

Re: Stripe Acquires Touchtech

#27

Post by AnssiH »

TazeTSchnitzel wrote: post #21
scrollaway wrote: post #6

Earlier quoted context omitted.

In this case, government regulation makes SCA required; but in Europe most banks already practiced SCA. For free. Here payment card fees are also far far lower because we don't have a credit card mentality of always seeking that tiny percent cashback, so these are much rarer in Europe. We also have banks themselves competing with Visa and MasterCard, for example in Belgium with bancontact. The banks offer merchants e…

What's interesting to me is that, in my experience, it seems that SCA not being used is more of a merchant than a bank problem. My previous bank (NatWest in UK) and my current bank (Nordea in SE) both support it, but a lot of merchants, especially UK ones, don't bother, which undermines the system.

Here in Finland essentially all local web merchants have used Verified By Visa and Mastercard SecureCode for at least 10 years now (authentication via bank credentials that use one-time codes or nowadays other 2-factor methods).

But I don't think I've ever seen them used on foreign stores.

Also: Local merchants here tend to use local payment service providers instead of Stripe etc. as the merchants need support for local payment methods, like "bank buttons" which have traditionally been the most common payment method (and much cheaper to merchant than cards).

Re: Stripe Acquires Touchtech

#28

Post by clairity »

saas_sam wrote: post #25
loceng wrote: post #2

As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?

Profits equal the difference between what customers are willing to pay for a product/service minus what it costs to provide that product/service. When you find a new way to deliver something valuable at a lower cost -- meaning less time & material resources -- you enjoy profits. Profits are then used to do things like hire people, invest in tech improvements, and acquire companies like Touchtech. Without profits, peo…

> "Without profits, people would pay for things at cost which sounds great in the short term, but would result in no money left for further improvements much less incentivizing hard work..."

note that profit (without qualifiers) == net income (as opposed to gross profit or operating profit)

so it's not true that no money is available for further improvement. profit is what's left over after re-investment (and other costs).

it's also not strictly true that it doesn't inventivize hard work. if the owners take money out of the company as salary and benefits, or they derive satisfaction from the quality of their work and/or pride in building an organization, they may be very well incentivized.

to actually answer the original question, you'd need to understand how value gets distributed in a value chain (including customers). it depends on the relative power of the various actors in the chain. if customers have a lot of power, they'll extract most of the value of the value chain (likely in the form of lower prices). if suppliers have the most power, they'll retain most of the excess value in the value chain as profit. based on a quick read in this case, the supplier has lots of power, so stripe will likely retain most of the profits.

Re: Stripe Acquires Touchtech

#29

Post by chrsstrm »

ummonk wrote: post #17
loceng wrote: post #2

As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?

Anecdotally, it feels like credit card cash back rewards have gone up a bit over time. 2% cash back was not normal until several years ago. I'd guess that market competition would drive up rewards as new entrants pass back more of the savings to consumers.

Those "rewards" aren't savings on fees, passed on to the customer, they are increased fees that are absorbed by merchants. Rewards cards carry higher fees the same way corporate cards have higher fees and the same way Amex in general has higher fees. Larger merchants can have a consistent effective rate on processing fees if their business has a good mix of non-rewards and debit cards (lower rates) in their transactions, but many smaller merchants take a bath on fees if too many of their customers use rewards cards. You'll also see many smaller merchants decline to take an Amex because it simply costs them too much. Your 2% on groceries or 3% cash back on gas doesn't materialize out of thin air and it sure as hell isn't coming out of the processor's or issuing bank's pockets, it is being paid for by the merchants you shop at.

Re: Stripe Acquires Touchtech

#30

Post by sdooley »

jwr wrote: post #13
arnvald wrote: post #8

Earlier quoted context omitted.

There's more to that. Anti-fraud mechanisms that require additional action on user's side, lower the conversion rate. For example 3DSecure mechanism redirects customer to another site where user has to put a number received in a text message. My phone is in another room upstairs. I cancel the payment and tell myself I'll do it later. Of course I might do it, but I might forget about it or change my mind. Another exam…

The implementations of 3DSecure I've seen were so terrible that I'm not surprised there is a drop in conversion rates. I would consider the user interface and the massive breakage as actively user-hostile. The redirects, terrible UI with blurry crappy bank logos, ugly dialog, and then I have to copy the code from my phone. And incidentally, SMS is a particularly bad method of authentication.

Worth checking this out. Banks are actively working on improving the customer experience through 3DSv2 https://stripe.com/en-IE/guides/3d-secure-2
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