By PYMNTS.com Staff (@pymnts)
During this week’s Innovation Project event, teams of industry professionals presented “best solutions” to industry problems they earlier had been assigned to address. On March 20, we learned which were winners of the Innovation Project Think-A-Thon Award.
Here are the winners for each of the three problem categories and their solutions:
Issue 1. Making Omnichannel Payments Work
The Problem to Solve: Devise a solution that would enable consumers and merchants to engage in commerce using a general-purpose card across any channel and that could be adopted as an industry standard.
The Winner: Team Patrick Gauthier, PayPal
Solution: Push-Payments. Our approach leverages smartphones and push-payment protocols to build a simple-to-use, very safe, and more economical way to make payments.
Overview: The merchant generates a QR code. including the Merchant ID, location, merchant deposit account routing information, transaction ID, transaction amount and details. Consumers read the code with their bank-provided payment app, and authorize the transaction with a PIN.
The transaction is sent from the mobile to the issuing bank, which moves the funds in real time over a debit network. The merchant bank generates a funds-receipt confirmation that is sent to the consumer wallet app and to the merchant payment server to allow for the closing of the transaction.
No card is required per se: the consumer funds a transaction from a revolving credit account, transactional credit facility, DDA, prepaid account, etc.
In store, the QR code is generated by the cash register and is displayed on a device or printed. Online, the code is displayed in the checkout page. On the mobile device, the code is passed from the merchant site, or app, to the issuing bank app when evoking payment.
In preauthorized transactions (e.g. gas pumps), the consumer authorizes a transaction amount up to a pre-authorized level. Actual transaction amount is confirmed at the end of the transaction and may not require a consumer action.
Offers and coupons saved by the consumer are processes in the payment app.
This solution provides consumers more control over the transaction authorization, which lowers dispute risks. It virtually eliminates account compromise, as there is no harm in sending out a deposit account number.
Issue 2. Defend Payments Systems From Cyber Hacking
The Problem to Solve: Devise a secure solution that would diminish the impact from malicious security attacks in both the physical and digital environments which would be readily adopted by all members of the ecosystem (consumers, merchants, networks, etc).
The Winner: Team Jeff Wakefield, VeriFone
Solution: We believe EMV will drastically reduce the counterfeit card problem. Alternative solutions to solve card-present fraud will likely take at least as long to implement. No matter what the card present solution is, it will push more fraud to card not present fraud.
Therefore, we focused on solving the card-not-present fraud problem. Our solution is to use a one-time transaction PIN for selected transactions to prevent card-not-present fraud occurring using stolen card data.
Consumers may have the option to opt out, or opt out below a certain dollar amount threshold. If they do, they will be responsible for any fraudulent transactions. The consumer also can choose to receive the one-time PIN via text, email, phone call, or in their mobile banking app.
When consumers enter their card data (or other credentials that get converted into card data), the authorization request is sent to the issuer. The issuer will decide when to prompt for the one-time transaction PIN based on the consumer selection and fraud analytics the issuer chooses, such as dollar amount, frequency of transactions, MC code, location, individual merchant, or, in the period following a breach, all transactions.
If these analytics indicate the potential for fraud, the authorization response will be returned to the app or Web page, and the consumer will be prompted to enter his or one-time PIN. At the same time, the one-time transaction PIN will be sent by the issuer to the consumer, who will enter it into the device app or computer browser. This will require a multi-pass transaction to the issuer to validate the PIN and return to the mobile app/Web page the approval information. The issuer should assign the consumer’s PIN only to the merchant that requested it, and it should have an expiration date/time.
Issue 3. Revolutionizing Global Cross-Border Payments
The Problem to Solve: Devise a solution that could increase the speed and efficiency of multi-country, multi-currency and multi-channel payments methods.
The Winner: Team Tom Brown, Paul Hastings, and Mike Love, Mozido
Solution: Global Value Transfer (GVT), a global, low-cost, fully compliant, cross-border value-movement system offered on a white-label basis. GVT facilitates real-time transfers between any two people, businesses or state actors in the value store of their choice. (If your aunt wants a goat, you can send a goat.)
GVT revolutionizes cross-border payments by transforming the components of the global value-transfer supply chain. It relies on a worldwide network of interconnected gateways and license holders as well as an open ledger with liquidity providers to support global value exchange:
- Gateways accept and receive value.
- License holders in each relevant jurisdiction ensure compliance with applicable law and supply the banking relationship in a given jurisdiction to make it possible for gateways to convert local currencies into the types of value desired by the recipient. Each License holder will decide which relationships to recognize within the system, making it possible for GVT to operate in countries that would otherwise be off limits.
- An open and transparent multi-value store ledger supports value exchange among the gateways. That system allows for essentially instant (i.e. less than 30 second) transfers between any two gateways or, in the event that consumers in a given country are permitted/choose to create wallets with a given gateway.
- Liquidity providers (or market makers) provide liquidity to support value exchange between the value pairs on the ledger. The transaction will clear as long as someone on the system is willing to support the trade of a given store of value (say Bitcoin) for another store of value (say a goat in a specific town in southern Italy).