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Ceturtdiena 17.08.2017 | Name days: Oļegs, Vineta

Payment card forgers were smarter before crisis

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Payment card counterfeiters operated smarter before the crisis and were harder to catch, while currently, possibly due to despair their methods are «simpler», the largest payment card service provider First Data Latvija Executive Director Zanda Brīvule-Jansone told in an interview to BNN, asserting clients money is safe.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUDespite the economic downturn, overall the Latvian population’s shopping habits have not changed – the number of purchases is still as large as in the pre-crisis period, only the purchase sums have decreased. Moreover, the company’s Executive Director speaks about the business experience in terms of overcoming the economic recession, employees selection policy and payment cards safety standards in Latvia and in the Baltics.

How did the economic recession influence First Data activities in Latvia?

Undoubtedly, payment cards reflect the transparent part of the Latvian economy. And I would like to say that from the viewpoint of payment card sector the transparent part has not changed in terms of habits. People make purchases just as they did before the crisis, only the sums are smaller. If retail traders say the turnover fell by 30% – 50 % at the beginning of the year, then our estimates are similar.

However, the habits have remained the same. What we saw when businesses went bankrupt did not leave a significant impact on consumers’ habits. In Latvia, we were accustomed to high growth rates. I have worked in this sector for eight years already, and the number of trading places accepting payment cards increased from year to year by 20% – 25%. Last year was the first to report a drop, as reflected in the Bank of Latvia statistics, which is the most objective statistics.

As a citizen of Latvia, it is good news for me to know that sometimes everything is not as bad as we are told. If we only read news portals without any other contact to economy, then it would be very easy to get depressed. Because the media draws a very grave overall picture. In fact, our enterprise awaited sharper decrease and scenario.

Does it mean the company had prepared for the recession timely?

Yes, we were already preparing for it, when the first crisis wave stroke in late 2007.

This is mainly because we are part of a major corporation; we carried out a series of measures and programmes. Basically, we created a kind of methodology, carefully looking at variable costs and revenues. We also re-concluded contracts with a number of suppliers, searching for new dealers to deliver for a more competitive price, therefore, we became a good and a large customer for many. Similarly, we reviewed our processes, but, of course, this is the most difficult part because on Latvia’s scale – we are the key players of this sector – it is not enough to benefit only from the process optimization.

All the corporation management agrees, if our company in Latvia is compared with a company elsewhere in Europe, or in America by different comparable indicators, the company is managed real effectively. As frequently experienced in the Baltic States – verging on the critical limit.

What do you mean with this «critical» limit?

We are living very economically. It would be unfair not to admit this.

Does specifics of your branch require certain level to be maintained?

Yes, it does. For me as a businesswoman 2008 and 2009 were simple. The work was previously carried out so convincingly there were no unreasonable programs or initiatives, as it tends to be in large corporations. If problems appeared we stayed practically intact. Likewise, regarding employees and staff reduction, we did not cut the number of workers. In the crisis period, the European Data Control Group was established for us, which is specifically linked to the company’s security. We even took on about six people, but these numbers are small. Overall, we employ 109 people. If there were any reductions in the company, they were more connected to changes in the personnel, because we wanted to replace and assign more qualified workers.

In general, how did employees react to all the crisis measures?

I believe they were very understanding. As soon as there was a signal the objectives were not clear, there was a somewhat larger discontent or resistance. Of course, there were such cases. But overall, I think the situation was understood. The management was the one to do more work, be it carrying out negotiations or processes change.

How does your company select candidates? The company is sufficiently specific and demanding, certainly not easily found knowledge is required.

Yes, we have a number of entry positions, through which it is possible to start career in the organization. One of them is the contact centre dealing with customers – responsibilities include answering payment card user calls, suspending cards, assisting in case of different problems and servicing traders. We provide outsourcing to many banks, which have passed these functions to us.

In fact, our employee selection policy began in the «good times». The best experience and satisfaction with an employee was when we looked for candidates through our own workers. It is the most efficient way, and we get the most accurate feedback. There is always a possibility of making a 50/50% mistake in employee selection and we have made mistakes several times when selecting workers from the outside than when the selection process was internal or with our employees’ recommendations. In such cases we have virtually never made mistakes.

Returning to the economic tendencies. The economy starts to revive. Does your company feel this?

Yes. Although this is currently more linked to tourism. However, the transaction volume and number will increase also in the summer months – July and August. But it is a very characteristic situation, as the summer is the most active period.

Looking in the future, which would be the company’s growth direction?

The organic market, its natural market growth, when people will increasingly use non-cash settlements, could be one of them. But, of course, we also develop other areas. For instance, we are trying to achieve cooperation in ATM network securement in the service. Therefore, we ensure ATM network outsourcing.

Will the costs serve as banks’ incentive?

The cost reduction, as well as the network optimization. The network optimization in the sense that the number of ATMs is reduced in places where they are three or four in a row. Usually, people are standing in line at two of them while the others are free. So it would be good to move these cash dispensers to places where they are necessary. Also, carrying out optimization in smaller cities, without leaving ATM where they are suboptimal, but substituting them with one cash dispenser for all banks. Certainly, the optimization may always cause inconveniences. The key factor is to achieve an efficient optimization. It is almost a science to displace cash dispensers, study customers flow and places where it is beneficial to set up ATMs.

Many entertainment venues and stores abandoned electronic payment options during the past year. What was the reason for that? Costs?

There were several reasons. Figures did not report that big drop. Firstly, some of the companies abandoning electronic payment options simply did not want their deals to be official. Secondly, such actions are not well though over, because actually costs have not been calculated at all. I will never stop saying it again and again – the average dealer’s commission payment is about 1% of the sum.

Currently it has surged a little, though. To be honest, such an option was not profitable for banks, although cash collection services costs are close to the same figure or even higher, adding also the work to prepare the money for collection, additional risks and telecommunication costs.

Another thing traders mention is – if it is two lats for a deal, then 1% corresponds to 2 santims plus a transaction. A dial-up phone call might have fixed tariff for each purchase, which is about 1.5%. Cheaper in Riga, but more expensive outside Latvia. The total commission payment would amount to 3-3.5 santims for a 2 lats worth purchase. It is not only profit, they have also other expenses, especially, if the purchase is small and in coins, because coins collection often costs 50% of the sum, So I believe such actions are not considered well enough, it might be ignorance as well.

Currently it seems electronic payment options are returning back…

They are. Traders realize how important service is. Speaking about supermarket chains, Rimi and Maxima have declared they will trade for the mentioned dealer’s commission, because it is profitable.

To change the subject, security must be the key aspect of your business…

It is. We have invested a lot in it.

How much has been invested to acquire the Baltic market and ensure these processes?

It is difficult to say, I have not thought about this from such a perspective. Any way, all of our profit is again invested in development.

Is that the owner’s instruction?

Yes, it is, because it is the way this sector works. We make pretty big profit, but I dare to say all companies in this sector do. Otherwise, you cannot ensure the capital. If banks own the company, it is up to them to decide upon investments, it is a different thing then. However, new standards, security demands and audit requirements appear all the time.

What determines security standards for our payment cards and other processes?

These are mostly Visa and MasterCard requirements, for the most part applying to processors as we. There are very strict internal security demands, meant for our own safety. They set the red line, in order we could manage risks better. Judging from experience, our demands even surpass the global ones, which allows as to ensure stability. It is our condition – we take each transaction, cash withdrawal and purchase personally. This is how we try to work.

Speaking about such an aspect as credit card forgery, how precisely do they manage to to that? How big are the risks?

This forms a part of our business risks. We as a company provide such services as fraud monitoring and fraud prevention, which banks take into consideration upon calculating services prices for traders and users. Visa and MasterCard international regulations are strict about this, providing that all the parties only benefit is there is no forgery.

But credit card forgers are developing their technologies as well… Does it turn out to be a vicious circle?

Exactly. We must raise the security level constantly. It happens with all technologies. To protect themselves banks developed chip cards that have not been counterfeited yet. It is some kind of a silent period at the moment. Some fraud takes place only at stores or ATMs with the magnetic stripe, without chips and entry of the user’s code.

So chip cards owners can feel safe?

Absolutely. Technically, fraud can take place if someone has copied the card, but therefore always follow the advice: never give your pin code to anyone under no circumstances and follow your monthly bank statements – it is a guarantee your money is safe. I myself encountered some problems just recently. With the business card, reporting several unknown transactions, purchasing tickets from Iceland to Scandinavia all the time. I know this causes panic, but do not worry, your money is safe, if it is not you who has carried out these transactions. You do not have to prove anything either, it the bank’s task. Fraud has become quite straightforward during the crisis.

You mean people standing behind your back while you are withdrawing money?

Also that. They even try it simply with a white plastic card. They have not even bothered themselves to stick some picture on it. And they try to withdraw money like that. Forgers were cleverer before. They do not get any far. No extensive and exceedingly intelligent systems are necessary to discover them.

What are your forecasts for 2010?

We believe the results of 2010 will be the same as in 2009 (BNN: First Data turnover in 2009 – 7.73 million lats, profit – 2.79 million lats).

Will you keep being profitable?

All in all, we will maintain profitability this year. It might be worse, though, but, all in all, the results are good. It is linked with First Data newly launched services, new niches. Our greatest achievement was re-conclusion of contracts with the already existing clients, as it guarantees our future development, although it took some part of our revenue.


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  1. Pop says:

    Let’s hope or money is safe. I myself have experienced someone standing behind my back an checking how I am taking out money from ATM.

    Thumb up 0 Thumb down 0

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