enabling digital payments - s3-us-west … “card not present” (cnp) ... the advantages however,...

Enabling Digital Payments TransformationHow Transactional Analytics is Delivering Business Moments

(+1) 408-462-AERO (2376) [email protected] www.aerospike.com

ContentsThe Rise of Digitalization is Changing the Payments Industry ....................................................................................3

Confluence of Forces Are Driving Change ..........................................................................................................................5

Transactional Analytics Creates New Value .......................................................................................................................8Systems of Engagement and Systems of Record ..............................................................................................................9Limitations of Conventional Data Architectures...........................................................................................................10 Transactional Analytics is Emerging to Power Intelligent Payment Systems of Engagement ..................................12Sustained Reliability at Scale is Essential .........................................................................................................................13Breakthrough Innovation .......................................................................................................................................................14How Payment Providers Are Applying Transactional Analytics .............................................................................15

3 | Enabling Digital Payments Transformation

The Rise of Digitalization is Changing the Payments Industry

Global payments are expected to exceed $2.3 trillion by 2019, and each year, non-cash payments are accounting for an increasing share of this massive market. Cashless transactions are growing by 10%, and according to one study, are likely to represent over one million transactions every minute by 2020.

Although cards remain the dominant and fastest growing payment instrument, the landscape is poised for rapid change and market disruption. The growing adoption of mobile payments, particularly among millennials, combined with a rapid uptake in eCommerce “Card Not Present” (CNP) transactions, and the emergence of non-banking payment service providers (FinTech) are among the many factors causing turbulence and disintermediation in discrete parts of banking and the payments landscape.

$2.3tGlobal payments revenue by 2019

Source: McKinsey

25%Millennials using Mobile for Payments

Source: Fico

87%of payment industry being disrupted by FinTech

Source: PwC

+10%Cashless Payment growth in 2015

Source: World Bank

Enabling Digital Payments Transformation | 4

An estimated

73%of enterprises report some form of suspicious activity that puts around

$7.6 of every $100 transacted at risk.

The proliferation of digital payments which can be executed anywhere, anytime, from any device is naturally appealing to both buyers and sellers. The advantages however, are accompanied by additional risk, most notably fraud and theft.

Confluence of Forces Are Driving Change

The payments industry has historically been relatively insulated from disruption. An extensive web of laws and regulations, combined with high capital barriers to entry, have limited the number of industry participants and fostered decades of relative stability.

This is changing. A confluence of trends in technology, business, the global regulatory environment, and consumer behavioral patterns are redefining how payment transactions are executed.



Agile payment providers are exploiting technology innovations in mobile wallets, bitcoin, wearables, location intelligence, biometrics, open banking APIs, big data and advanced analytics, cloud computing, and tokenization to disrupt the status quo.

At the same time, the business landscape is being transformed by a growing class of FinTech payment providers such as PayPal, Stripe, and Square, as well as by new digital payment options initiated by traditional financial services companies. Telecommunications companies, mobile device manufacturers, established Internet companies, and firms in other adjacent industries are also expanding the payment ecosystem.


Governments around the world are embracing digital payments and updating regulations to promote non-cash payments and ensure consumer protection. In the United States, the Mobile Payments Industry Workgroup initiative is bringing regulatory agencies such as the Consumer Financial Protection Bureau, Federal Reserve, Federal Trade Commission and other agencies together to harmonize and standardize regulations. At the same time, European Union governments are enhancing security requirements and spurring competition with the upcoming Payment Services Directive 2.

Consumers are propelling the digital payments industry in all facets of everyday life — ride sharing, digital music, movie tickets, vacation rentals, and online auctions represent just a few of the generators of digital payments.


Transactional Analytics Creates New Value

Extreme competition from non-traditional payment providers is motivating the entire industry to aggressively create value-added services for retail and corporate customers.

Recent advancements in analytics, artificial intelligence, and machine learning represent a generational opportunity to move digital payment transactions beyond being simply convenient and cost-effective.

By integrating analytics into the payment process in real time, each transaction has the potential to produce better business outcomes. Personalized products and services, more engaging customer experiences, threat detection, and fraud prevention are among the transactional outcomes that can ultimately grow revenues, increase customer loyalty, and reduce risk.


Systems of Engagement and Systems of RecordTo fulfill the promise of leveraging transactional analytics to achieve more profitable and rewarding business outcomes, an entirely new payment architecture is required — one that combines the virtues of transactional systems of record and analytics systems.

Noted business author and strategist, Geoffrey Moore, has coined the term "system of engagement" to describe a new generation of dynamic, personalized and interactive applications. In contrast to traditional systems of record, systems of engagement are ubiquitous, contextual, mobile, location-aware, and embedded in the way consumers and businesses interact.

These new applications focus on people, not processes, and harness a perfect storm of mobile, social, cloud, and big data innovation. The user experience is delivered in the context of the daily lives and real-time workflows of customers, partners, and employees.agement that delight buyers and sellers at “the speed of now.”

PAYMENT TOUCHPOINT

• Point of Sale • PC • Mobile Device

• FinTechs• Banks• Payment Processors

• Telcos• Card Issuers• Device Manufacturers

PAYMENT ENTERPRISE

TRANSACTIONAL T A ANALYTICS

IN MILLISECONDS

CardMobile Wallet

Digital CurrencyCredit Account

Consumers

Businesses Merchants

Suppliers

The challenge for digital payment providers lies in overcoming the limitations of conventional architectures to deploy intelligent payment systems of engagement that delight buyers and sellers at “the speed of now.” And systems of engagement rely on the power of real time data architecture.



Limitations of Conventional Data ArchitecturesThe ability to deliver actionable intelligence within milliseconds, at the point of transaction, is severely constrained by conventional data architectures.

Prevailing data architectures today are built to store transactional and analytical data separately, in silos. Consequently, they fail to bring transactional data together with historical data for analysis in real time. Most analytical database systems are designed to access historical data at periodic batch intervals. They cannot meet low latency requirements, resulting in unacceptable response times, outdated information, or incomplete information. This can lead to customer abandoment, payment denial, fraud and missed cross-sell opportunites and eventually, all can hurt the customer experience.


Transactional Analytics is Emerging to Power Intelligent Payment Systems of Engagement Modern systems of engagement are incorporating a new generation application architecture that eliminates the wall between transaction processing and analytics. Gartner refers to this as "Hybrid Transaction/Analytical Processing" (HTAP).

An (HTAP) architecture is best enabled by in-memory computing technology to allow analytical processing on the same (in memory) data store that is used to perform transaction processing. By removing the latency associated with moving data from operational databases to data warehouses and data marts for analytical processing, this architecture enables real-time analytics and situational awareness on live transaction data.

TRANSACTIONSYSTEMS

HYBRID

Transaction /Analytical

ProcessingSystems

ANALYTICSYSTEMS


Sustained Reliability at Scale is Essential Not all hybrid architectures are the same in terms of reliability, availability, speed, and maintaining data integrity. As workloads increase, the ability to predictably process high-volume, concurrent transactions while performing complex analytics against massive data sets in milliseconds becomes increasingly difficult.

Prevailing relational and NoSQL databases with caching as well as RAM-based in-memory databases often fail, particularly when unanticipated peak loads occur. Without warning, response times can become unacceptable, data can get lost, errors can occur, and systems can become unavailable.

Aerospike is focused on a singular purpose. Its mission is to deliver a database to power systems of engagement, with predictable performance — at any scale, with the lowest total cost of ownership.


Breakthrough Innovation

Aerospike is the industry's first database with hybrid memory architecture, incorporating revolutionary advances in database design.

A number of unique and innovative attributes of the Aerospike database architecture enable applications built upon it to consistently deliver unprecedented transactional analytic performance at any scale, at as little as one fifth the total cost of ownership of other databases.


How Payment Providers Are Applying Transactional Analytics FinTech companies as well as established payment providers alike recognize that transactional analytics is no longer optional. To survive and grow, payment service providers must continuously invent new use cases leveraging analytics at the point of engagement to promote customer loyalty and profitability, while reducing costs and risk.

Fraud detection and prevention. Detecting false positives, payment fraud, AML check, online and POS purchase fraud, bot account creation in real time, enabling faster settlements and safer transfer of money.

Real-time digital identity check. Checking digital identity, authentication, two-factor authentication check, biometric identity check at POS, online money transfer, P2P payments, cross-border processing, cyber threat, AML check.

PSD2 compliance. Payment services providers need to make customer data accessible as APIs for 3rd party consumption.

Digital wallet and mobile commerce. Digital identity authentication, two-factor check for commerce, faster response to account inquiry, catalog access for m-commerce, loyalty and rewards management POS targeting and offers. Targeted, personalized offers and coupons at POS and time of purchase based on profile data.

POS targeting and offers. Targeted, personalized offers and coupons at POS and time of purchase based on profile data and shopping behavior.

Learn More

If you’re an application developer or technical executive interested in learning more about how Aerospike works and how it can benefit your payment system, download our white paper, Building Future-Proof Systems of Engagement with a Hybrid Memory Database Architecture.

For more information, visit www.aerospike.com/digitalpayments

(+1) 408-462-AERO (2376) [email protected] www.aerospike.com

enabling digital payments - s3-us-west … “card not present” (cnp) ... the advantages however,...

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