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Consumers Make The World Go ‘Round Edition — Visa Checkout, Credit Rating And Cybercrime

Well, it’s finally come upon us. The last “official” week of summer has arrived. And after last week’s thrills and spills on the stock market, most of us are hoping to ease into the last week doing positively normal things like wearing white (it is still socially acceptable, pre-Labor Day) and cooking most of one’s food on a grill.

And what better way to be the coffee break hero than by talking about all the impressive things that happened last week that weren’t in any way connected to a concern that China might be about to topple the international economy.

With that in mind, we bring you this week’s edition of the PYMNTS Data Dive.

Visa Checkout Celebrates First Birthday — 6 Million New Friends Attend The Party

Visa Checkout recently celebrated its first “birthday,” and on Aug. 24 it gave us a peak at the guest list at its birthday party. The service has 6 million registered users, and enrollment, they say, has been climbing at about 30 percent per month this summer. All in, registered user signups have increased 92 percent since 2015 began.

Visa also announced 33 additional merchants joining the payments platform party, including Best Buy, Taco Bell, Under Armour and Barnes & Noble.

As Sam Shrauger, senior vice president of digital solutions at Visa, explained in a recent interview with PYMNTS, while climbing numbers are always nice to see, the Visa Checkout vision is bigger than a numbers game. Shrauger says Visa is all about signing up the 1,000 or so merchants that drive a disproportionate amount of consumer spend.

Chris Curtin, Visa’s CMO and chief digital and innovation officer, spoke to PYMNTS shortly after the news was released.

“We’re thrilled to partner with some of the largest merchants on the Web. In a little over a year since we launched the service, the response we’ve seen from both merchants and consumers has been overwhelmingly positive. And the momentum continues at a high level as we see acceptance and enrollments grow on a global scale,” Curtin remarked.

Curtin noted that Visa’s focus on a “quick and streamlined checkout process results in more conversion and fewer missed opportunities for the merchants.” And that’s not just product loyalty from an employee talking — those are the results of an independent study of digital payment products done by comScore.

“Consumers love [Checkout], too,” Curtin noted, citing checkout times that are “22 percent faster” through using the service.

And while the practical value of getting a fast process to go 22 percent faster may be hard to quantify, the benefits to the merchant, Visa says, can be seen in the numbers. On average, Visa Checkout customers complete 12 percent more transactions across all eCommerce sites. This is regardless of the checkout option they use — card on file or competing payments methods.

Additionally, comScore’s figure revealed that shoppers are “17 percent more likely to complete their purchases with Visa Checkout than those using PayPal.”

“The many advantages of Visa Checkout — including single sign-in, zero liability and the speed, ease and security — truly appeal to consumers,” Curtin remarked.

Along with Visa Checkout’s global merchant growth, Visa reported an increase in the number of issuers around the world that are using the service, including China and United Arab Emirates, given the high demand for overseas goods.

“It’s great to see banks like CMB and SPDB bringing best-in-class enrollment experiences to their customers in China who are eager to shop overseas,” said Shrauger. “As more merchants and issuers integrate Visa Checkout, the number of consumers seeing the benefit of a faster online checkout experience also grows. We’re starting to see the network effect kick in.”

Happy first birthday, Visa Checkout.

CFPB Is Curious Why Consumers Are Giving Credit Rating Agencies Low Scores

Though Festivus is traditionally celebrated in December as a sort of antidote to the somewhat saccharine holiday season, the CFPB keeps the spirit of the holiday alive with its monthly airing of grievances — better known as the consumer complaints snapshot. 

Debt collection held court in its 23-month “winning streak” as the recipient of the most complaints — 8,224 complaints representing 31 percent of all complaints submitted in July 2015. Raise your hand if you are really surprised by this. People who owe money don’t like being asked repeatedly about when they’re going to get around to paying the balance.

Credit reporting (6,696 complaints) and mortgage (4,498 complaints) snapped up the silver and bronze medals in the CFPB’s consumer complaints competition.

It was something of a surprise trip to the podium for credit reporting agencies, where complaints spiked by 56 percent between June and July of this year. Compared to the year prior, the number of credit reporting complaints recorded between May 2015 and July 2015 increased by 45 percent.

“Whether a consumer is trying to get a mortgage, apply for a student loan or buy a car, credit reports are fundamentally important in allowing people to access their financial goals,” CFPB Director Richard Cordray said in a press release highlighting the snapshot results. “As we see a rise in the number of consumers complaining about this issue, the bureau will continue to work to ensure that credit reports are fair, accurate and readily available to all consumers.”

According to the report, consumers’ main area of reported complaint was with with incorrect information in the credit reports themselves. More than three-fourths of these types of complaints (77 percent) were related to inaccurate information on credit reports negatively impacting credit scores, such as paid debts or debts not yet due showing as outstanding or overdue.

Consumers’ second main area of issue was with difficulty accessing their reports online due to overly rigorous identity authentication measures. Reportedly, consumers unable to easily access data online were forced to send copies of sensitive information through the mail. The report results showed consumers criticized this process for not only being potentially insecure but also time-consuming.

CFPB’s report also broke down the top 10 most complained about companies, with the section’s data being based on complaints filed between March and May 2015, as to reflect the 60 days companies have to respond to complaints. A whopping 97 percent of consumers’ complaints involved three of the nation’s “Big Three” credit reporting agencies: Equifax (991 complaints), Experian (926 complaints) and TransUnion (732 complaints).

Earlier this year, the three biggest companies that collect and disseminate credit information on American consumers vowed to improve their ways, specifically when it came to addressing errors on user reports.

In May, Equifax, Experian and TransUnion agreed to a settlement with 31 state attorneys general to pay $6 million and to change certain practices related to disputes and data collection over the next three years. Several of the business practice changes echo terms of the assistance plan, which was rolled out in March by the agencies.

The bank account or services sector as a whole saw the greatest month-over-month decrease, with a 4 percent drop in complaints.

Cybercrime: Serious Times Call For Serious Measures (And Even More Serious Price Tags)

The Ashley Madison hack may be old news at this point, but the fear inspired by an increasingly creative generation of hackers is anything but out of style.

As thieves are finding ever better ways to leverage the plethora of personal information available online into criminal enterprises, they are collectively racking up hundreds of billions in ill-gotten revenue a year. The flip side of that coin is that the costs of cybercrime run deeper than fraud alone. According to data jointly released by Ponemon Institute and authentication tech provider Duo Security, recovery from a data breach takes an average of 45 days at a cost of $35,414 per day, with the expense split among direct labor (26 percent), cash outlay (22 percent), productivity loss (21 percent), overhead (15 percent) and indirect labor (14 percent).

Whoa.

Unsurprisingly, the business of halting, or at least significantly slowing, cybercrime is positively booming.

This year, the global cybersecurity marketplace is worth a little over $100 billion. Market Research predicts that figure will jump approximately 62 percent to $170.21 billion by 2020.

“With last week’s news on the Ashley Madison and Established Men hack, it’s not surprising that companies are nervous about the potential dangers of cyberhackers. And it’s not just online companies that face these dangers. Big names such as JPMorganTarget, Zappos and even White Lodging Services have all experienced data security breaches,” the research firm said in a press release.

The biggest share of investments are predicted to be directed at antivirus and anti-malware products, according to the the research group’s “Cyber Security Market in North America 2015–2019 report. Making a big push, however, are also firms focused on monitoring, detecting, reporting and mitigating cyberthreats, in hopes of protecting the sensitive nature of IT systems and consumer data.

So far, cybersecurity ventures have raked in over $1 billion in venture funding to lock those hackers out. CB Insights found that the first half of 2015 saw investors funneling $1.2 billion into cybersecurity startups, which is a drastic increase from 2013’s first half, when $771 million was invested in cybersecurity-related companies.

The moral of this week? Consumers make the world go ’round. Protecting their data will get investors to part with billions. Getting them to spend will get payments players to invest in ways to do that without friction. And giving them the tools they need to be productive members of the financial service ecosystem is worth investing in to get right.

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Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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