Visa CEO Al Kelly used the company’s Tuesday earnings call to highlight actions to protect customers from person-person payment fraud, driven by Visa’s existing platforms that already include fraud protection capabilities. How will this boost their p2p fraud protection? John Stewart adds details in Digital Transactions:
“Kelly added that the use of Visa Direct, Visa’s real-time transfer system, can be a bulwark against fraud in P2P payments. ‘One of the terrific things about Visa Direct is that it isn’t running on a different new platform,” he said, according to the transcript. “It runs on VisaNet and therefore has the ability to utilize all of the same capabilities that we have on VisaNet, including those related to [know-your-customer] and those related to fraud prevention.’”
Visa’s existing expertise in fraud protection and regulation through credit cards gives it an advantage over other providers in the P2P space, as highlighted through Mercator research. Our research shows that credit card customers are most satisfied with resolution of fraud incidents while P2P customers tend to be on the lower end of the scale, as covered in my recent P2P Market Update. The P2P community will benefit from shared learning between pure play P2P vendors and multi-channel providers such as Visa to make certain that customers receive the best possible outcomes. Visa, as Kelly mentioned, will continue to identify opportunities and learnings from their P2P partners, including Zelle to ensure they are providing customers a clear and secure transactional platform:
“Kelly said, ‘We’ll just have to make sure that we’re working closely with Zelle and other partners to make sure that we’re contributing as much as we can to make sure that that service is secure as can be.’”
Zelle continues to get the lion’s share of criticism in the news due to current lawsuits and their umbrella product that serves a high percentage of banks and credit unions across the country. Despite that broad coverage from Zelle, the problems with fraud and scams are industry wide within the P2P ecosystem, as reported by my colleague Sarah Grotta this past spring. The results of pending legal proceedings against Zelle will need to be monitored to identify potential new restrictions or protections needed for all P2P providers.
Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group