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The Paypers sits with Elena Emelyanova, Senior Payments Manager at Wargaming, to discuss different types of fraud that the online gaming is facing and whether this industry is ready for PSD2
Could you share with our readers what is Wargaming?
Wargaming is an award-winning online game developer and publisher headquartered in Nicosia, Cyprus. Operating since 1998, Wargaming has grown to become one of the leaders in the gaming industry with 4500+ employees and offices spread all over the world. Over 200 million players enjoy Wargaming’s titles across all major gaming platforms. Their flagship products include the massively popular free-to-play hit World of Tanks and the strategic naval action game World of Warships.
Wargaming operates across 19 offices and development studios all over the world. Our market penetration is global, including CIS, EU, NA, APAC (first 2 are the biggest).
What are the main types of fraud that you are experiencing and what transaction types are the most affected?
Main type of fraud we see is coming from card payments. And I mean a real fraud, not friendly fraud coming from a child who took his father’s card to buy a shiny tank. Despite of the fact that the game itself does not permit reselling goods after you bought something and there is no cash out, which already decreases the options for fraud big time – there are still schemes where bad guys are ‘doing their job’. For example, one of the most popular fraud type we see is when fraudster is creating a new playing account (but not playing) and the same day/hour is buying different in-game items with a stolen card. He will than make screenshot of the playing hangar with all pretty staff he bought visible on it and puts on sale this account for a comparatively cheap price versus real total value of the items.
Once the cardholder realises that his card has been compromised – he claims a chargeback.
The thing is that the playing account is being automatically blocked once a chargeback notification reaches our system. Therefore, once somebody buys this account from a fraudster – he is not able to enter the game. The account can be unblocked only in case of full chargebacks’ repayment or when the items will be fully removed from account. Not the best purchase, right?
Another typical scheme we see is when a fraudster is announcing discounted in-game items delivery whereas credentials of the player’s account should be provided to him, along with a payment, let’s say, half price of the real item value. Surprisingly our players are doing it regularly despite of fraud warnings we send. The fraudster enters the player’s account and makes a purchase with a stolen card. Once the real cardholder realises that his card has been compromised – he files a chargeback, which as explained above leads to account block. The cheated player contacts our support team and is informed that in order to be unblocked – he needs to fully repay the fraudulent purchases with his own cash.
What are the best fraud prevention strategies for securing both the online gaming platforms and the consumers’ data? What is the main criteria that you apply when selecting a fraud prevention solution?
Main criteria by which I’d describe the perfect fraud prevention solution would be ‘flexibility’ and ‘data transparency’. Flexibility – because fraud is a live entity, with a constant development and self-improvement. If you are not following the same trend – you are in trouble on a long term. ‘Data transparency’ – because you need full data access for analysis to make the changes and ‘follow the trend’.
The best strategy in fighting fraud would be a constant collaboration between the 3rd party (antifraud solution/acquire) and yourself. What I mean is that expertise of a specialised company is of course unquestionable, but only you are the expert of your customer behavior.
Also, individual approach per region/per country is recommended, due to specifics of each market. I would also advise to perform BIN analysis and analysis per scheme, which may result in different system settings (whether you are using risk rules or machine learning) due to peculiarities.
There is around a month left until PSD2’ SCA will go live. Is the industry ready?
The payments ecosystem is not ready and it requires more time to be fully prepared. The majority of merchants, which are small and medium-sized enterprises, have a very low awareness level of need for SCA compliance. Customer awareness is also very low, and even with additional education people won’t be happy to be enrolled in a payment experience with additional friction. Issuers and acquires readiness is fortunately significantly higher, however being ready to support EMV 3DS doesn’t mean that all the banks will be ready to support all available SCA exemptions and exclusions at same time. After the latest EBA opinion published on 21 June 2019, which gives possibility for NCAs to provide grace period for issuers, we see diversity in time extension per country, and therefore all payment industry participants are expecting consistency with this regard across Europe and waiting for guidance from EBA.
Here at Wargaming we are strictly following the roadmap for SCA implementation and will be fully ready to support EMV 3DS by the deadline of 14 September.
We encourage fraud prevention experts to share their knowledge with their peers in order to bring a positive impact on the online business environment. Therefore, what advice can you give to other merchants so they can keep their business secure and their customers loyal?
SCA will definitely bring value by reducing fraud and increasing consumer trust in electronic payments. However, this will happen only in case of frictionless flow, when customers will not be bothered by additional steps to identify themselves. With the challenge on the other hand – it will bring friction and negative UX, which will impact conversion. My advice would be for merchants to be fully prepared for the deadline of 14 September and start educating their customers.
About Elena Emelyanova
Elena Emelyanova is a Senior Payments manager at Wargaming. She specialises in ecommerce acquiring and fraud protection globally having a strong understanding of various markets throughout Europe, North/South America, Asia, and CIS. With the benefit of working at a mobile carrier company for 4 years before joining Wargaming team and a 4 years background of leading NA/ LATAM payments team at Wargaming, Elena helps Wargaming to optimise the Alternatives and card payments flows all over the world, as well as keeping the fraud level low. Elena has over seven years experience in the payments industry.