PAYMENT INNOVATION inDIGITAL AND GAMING CONTENTModerator: Vanita Pandey (VP Marketing and Strategy at Arkose Labs)

Panelist

Peter KovacsNY Times

Manja PfeifferMicropayments

Expert

Thomas PernotFraud and Billing

Manager

Kevin GosschalkCEO and Founder,

Arkose Labs

Peter KovacsSubscription and payment leader

at The New York Times

Customer Journey - Opportunities and Challenges

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Customer Journey

Attract MonetizeEngage

Content draws customers

Customers register

Diversified payment types

improve conversion

A focus on recurring charges and fraud improve retention

Monetization Opportunities

Diversify payment types-

Knowing which are right for you (Tips):

o Ensure payment types support recurring billing.o Find out what your customers like to pay with.o Do your due diligence. Not all payment methods work

globally.o Wallets are funded by other payment methods. Make

sure they support what you need.Focus on recurring charges and fraud

o Name an SME, or formalize a team.o Get visibility into approval rates.o Analyze, hypothesize, and test.o Watch for changes in the payment

industry.o Don’t forget about fees

Monetization Challenges

Monitoring approval rate data-

o Issuer extended decline data (IEDD) and the generic decline.

o Watch for external influencers (Cosco branded card moved from Amex to Visa)

The Age of the Customer

o Consumers want to pay different amounts for news content.

o Create value customers will buy.o Continuous journey = customer loyalty?

Fraud and Regulatory Considerations

o Visa’s free trial mandate (helping make the customer aware of trial related charges).

o PSD 2, GDPR (Protecting privacy of the consumer)o Bypassing our paywall (closing ‘side-doors’ where

non-subs access paid content).o Rapidly evolving fraud patterns

Manja PfeifferMicropayments Expert

Micropayments: Monetizing Digital Content

Source: The FairPayZone

Micropayments OpportunitiesPeople want to pay different amounts for digital content

Head

Long Tail

Pric

e

o Green revenue: Capped at set price

o Orange head: Lost surplus

o Yellow tail: Lost sales

Micropayment Options for Digital Content

Complimentary to subscriptions Onboarding

o Engage digital non-subscribers in the funnel

o Convert readers that value the content to subscribers

o Generate revenue from low frequency visits

o Suitable for users who are never going to subscribe

Expert’s views

Con

sum

er’s

vi

ews

Source: Dissertation, Dr Manja Pfeiffer

Acceptance of MicropaymentsExpert’s views ≠ Consumer’s views

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Thomas PernotCompany:

Role: Online Business - Fraud and Billing

Manager

Games: FINAL FANTASY XI & FINAL

FANTASY XIV

o Setup customer support policies & objectives

o Weekly / Monthly / Yearly reports o Payment inquiries support leado PsP / APM / Partners sourcing

o Setup fraud prevention policies & strategies & objectives

o Financial activity analyze + weekly / monthly and yearly reports

o Find fraud patterns and fraudulent accounts

o Monitor, update or create fraud prevention rules

Fraud Prevention specialist:Billing specialist:

Online Business – Supported MMORPG

Developer(s)Square (before April 1, 2003)Square Enix

Producer(s)Hiromichi Tanaka (1999–2012)Akihiko Matsui (2012–)

ReleaseMay 16, 2002

DeveloperSquare Enix

ProducerNaoki Yoshida

ReleaseAugust 27, 2013

Registered players (as of 2019)18 million

FINAL FANTASY MMORPGs Monetization

o Free Trial Accounts

o Main game & Expansions

o Upgrade to collector versions

o Subscription base economic

model

o Micro Transactions

o Incentives / Promotion / Event /

Influencers

Payment Optimization

o Choosing payment partner

o UX

o Cards optimization

o APMs optimization

Types of Fraud we are facing & How do they make money?o CNP fraud

o Bot / Cheat / RMT activities

o Account Take Over

o Currencies Exploit

o Payment Evasion

o Friendly Fraud

o Region Restriction Bypass

Fraud prevention methods

o Cancellation & Refunds

o Account Procedures

o 2 Factor Authentication

o Rule Based Fraud Solution

o Machine Learning / AI

o RMT in-game counter

measures

o OTP / Software token

o Email Verification

o AVS – Geolocation

Kevin GosschalkCEO & Founder

Bankrupting the Business Model of Fraud

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Connected FraudEcosystem

Attacks Increasing in Size,Complexity and Frequency

Travel

$45.53Subtotal

Entertainment

$164.65Subtotal

Social Media

$10.21Subtotal

Proof of Identity

$92.20Subtotal

Personal Finance

$710.65Subtotal

Online Shopping

$164.65Subtotal

Breaking the Fraudsters Economics

Thank you for joining us.Questions?

Appendix

Questionso What monetization means to you?

o What methods of payments are you using? What types the challenges

are you facing?

o What are the best strategies for payment optimization?

o What is fraud? What it means to you?

o What fraud prevention methods are you using?

Panel DescriptionDraft

▪ Topic: Payment innovation in Digital and Gaming Content.

▪ Ho w to enable payments in the space.

o Payment in the background - involun

o Subscription -- monthly basis. There is a free version, limited content.. Incentives to upgrade to the

paid version | micro transactions

o Constantly trying to break into the model -- micro transactions vs. subscription (engagement)

o Local/APM

o SCA and PSD2 (exemptions.. Concerned about the EU region)

▪ What are the challenges folks face (customer experience vs. monetization)

o Price sensitivity

o How much free to give (game/paywall)

▪ How to navigate the rapidly evolving attack/fraud vectors.

o Using these platforms as testing grounds.

Panel DescriptionThree acts:

Act 1: Focus on customer journey: Awareness, Engagement, Monetization. Customer

experience. The world of digital entertainment (media, gaming), engagement, path to monetization,

enabling. Struggles with subscriber retention

Act 2: Trust vs. Fraud: Deep dive on monetization (local payment methods, regulations),

subscription vs. micro transaction, navigating fraud, Balancing customer experience and trust

Act 3: The dark world of fraud and abuse. Why is the segment exciting for fraudsters, Attacks that

frusters make on the segment and what mitigation strategies business can employ