ONLINE CREDIT CARD FRAUD

the East African Travel Market

AITEC BANKING AND MOBILE COMESA – SEP/2013

ERAN FEINSTEIN – 3G DIRECT PAY LIMITED

3G Direct Pay – WHY?…because we believe that service providers and end customer should have the FREEDOM to shop and pay online using ANY card type and ANY currency…

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

HOW we doing it? End-to-End solution – filling the gap

Designed and maintained for the Africa travel marketEast

Southern

Multi layers packageTechnology / Platform

Bank relations

Customer care

Fraud Prevention and Risk Management

Internal industry settlement platform

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

HOW we doing it?

The Platform Real-time transactions

Online payments processing

Online / Offline / Direct / API

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

Payment Options Professional bank relations

EU, US, KE, TZ..

All cards, mobile, PayPal and more..

HOW we doing it?

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

Fraud Prevention Real-time monitoring

Advanced scoring

Skilled team

Customer Care 24/7 for the end customer and

the travel provider

It’s about conversion !

HOW we doing it?

Providers settlement platformBased on our own providers network

Real-time payment allocation

Instant confirmation

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The NetworkAirlines (24) , Hotels and Lodges (150) , Agents and Tour Operators (300) , Diving Centers (10)

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The East African Travel IndustryThe main players:

Airlines

Hotels

Lodges

Tour Operators

Travel Agents

2500 to 3000 providers (Kenya, Tanzania, Uganda, Zambia)

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The East African Travel IndustryKenya and Tanzania – quick figures

More than $4,000,000,000 (annually)

Online transactions (credit cards and PayPal) $35,000,000 to $50,000,000

Typical Customer80% - Europe and USA

15% - Eastern Africa (steady increase over the past 2 years)

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The East African Travel IndustryCredit Card Types

80% - Visa and MasterCard

15% - American Express (4% until 2011)

4% - PayPal

Average TransactionAirlines $450

Hotel $500 - $1,100

Travel agent $1,200 - $1,500

Tour Operator $1,500 - $2,200

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The East African Travel Industry90% of transaction – classic CNP (card not present)

2% of transactions – 3D secure

Charge-Back0.35% to 0.50% (since 2009)

Using stolen card and fly to the Safari ??

90% of C/B from airline transactions

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

Where is the Risk?Classic Fraud (low to med)

Stolen credit card

Identity theft

Consume the service

Merchant Fraud (high)Fake agents

Professional fraudsters

No service, no passengers

Friendly Fraud (low)Consume the service

Can’t avoid….

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The Online Fraud – How Does It Works?Individual Fraud

General Characteristics Individual fraudster, One-time campaign, access to stolen cards list (low quality), no ‘fine’ details

The ServiceFlight/s, One way, short term booking

PassengerThe fraudster, family member/friend

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The Online Fraud – How Does It Works?Mass Fraud

General Characteristics Individual/group, professional fraudster/s, massive stolen cards list (low quality), acting as an agent, no close relationship with the

passengers, massive payment attempts, very low conversion rate

The ServiceFlight, one way and return

PassengerNot the fraudster, no idea that the service paid using stolen card

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The Online Fraud – How Does It Works?Professional Fraud and Identity Theft

General CharacteristicsGroups only – organization, stole cards list – high quality, 3D-secure lists, access to the card holder details, using ‘fine’ details –

complete ‘storyboard’

The ServiceFlights, accommodation

Passenger The passenger is also a professional fraudster

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

The Online Fraud – How Does It Works?Merchant Fraud

General Characteristics ‘well organized scam..’, mitigating the KYC procedures, designed websites, products and services, real people, working plan, long

term operations

The serviceDetailed service, package, accommodation, no-flight !

PassengerFake but well designed identity, no real passenger

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

How to Mitigate the Online Fraud?

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |

9/13/2013 | AITEC BANKING AND MOBILE COMESA SEP/2013 | ERAN FEINSTEIN | 3G DIRECT PAY LIMITED |