New Report into CNP Risk Management Across the Value Chain

Mercator Advisory Group’s new report, entitled ‘Card-not-present Risk Management Across the Value Chain’, examines strategies for payment industry stakeholders to better manage fraud risk in a more collaborative fashion. The research attempts to suggest better card fraud countermeasures.

The analysis begins with a look at the current dynamics in global e-commerce markets that are making adoption of collaborative strategies more important. Next, the report examines the current implementations of risk management practices within payment acquiring, online and multi-channel retail and card issuing, as well as strategic concepts that may propel these practices into the next generation.

“Payment card risk management today exists in silos that correspond to each link in the transaction flow – generally, the merchant, acquirer, and issuer and network partner,” explained David Fish, senior analyst at Mercator Advisory Group and author of the report. “The various systems and processes that enable card transactions only talk to each other in limited ways; to a large degree, each party uses them only to manage its own risk. In other words, issuers, merchants, and acquirers concern themselves mostly with managing their own risk out of self-interest without much regard to risks posed to other members of the value chain.”

The highlights of the report include:

  • An in-depth analysis of the global growth of e-commerce and its implications for card risk management practices.
  • Explanation of current risk procedures and duties associated with the various card payment value chain.
  • Coverage of instances where collaboration exists between stakeholder entities (both of the same type and of different types) in risk processes and practices.
  • New criteria with which the payments industry should evaluate or build fraud prevention and risk management tools.
  • Strategic considerations and action steps for risk managers in the payments industry and at card-not-present (CNP) merchants.

The report mentions the following companies: 41st Parameter; Acculynk; Amazon; American Express; ChargeAnywhere; CyberSource; Ethoca; FICO; iovation; Kount; NICE Actimize; Retail Decisions; RoamPay; SecureKey; Square; ThreatMetrix; Visa.


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