3 PAYMENT METHOD SCORECARD: DIGITAL WALLET (PASS-THROUGH)
3.3 Digital Wallet Digital Wallet (Pass-Through) Note: Given pass-through digital wallets are most often passing through debit or credit card credentials, scores and justifications are similar to debit and credit card. Security
Liability Rules (i.e., Network Rules) Similar to card liability rules, however, the increased usage of network tokens associated with pass- through digital wallets makes the rules more complex, leading to confusion among liability. Refund Mechanisms Refund experiences facilitated by a card payment via a pass-through digital wallet can be as simple as returning to the store with the purchase, receipt, and form factor used for the original transactions, to as complex as an omnichannel refund where the customer may have purchased with a digital form factor of a physical card. Some of the limitations of current card products related to credential mapping across various channels for servicing refunds have grown in prominence, with checkout methods such as buy-online, pick-up-in-store (BOPIS) now a common feature of the post-pandemic retail environment. Brand Risk It is not risky at all from a brand perspective to accept pass-through digital wallets. Fraud Risk (Merchant) Most fraud experienced by merchants involve cards, including pass-through digital wallets. The increased authentication, e.g., possession and inherence, provided during a transaction with a pass-through digital wallet may make it less risky than physical card payments. Fraud Risk (Consumer) Consumer fraud risk for pass-through digital wallets is dependent on the underlying card type
Metrics
Weight Score
Approvals Considerations Error Resolution Framework System Liability Rules (i.e. Network Rules)
15% 4.0
15% 4.0
20% 2.5
Refund Mechanisms
10% 4.0 10% 5.0 15% 3.5 15% 4.0
Brand Risk
Fraud Risk (Merchant) Fraud Risk (Consumer)
TOTAL SCORE
3.7
Approvals Consideration Similar to card approval considerations, however, false declines with pass-through digital wallets are less likely in comparison due to increased usage of network tokens. Error Resolution Framework Because pass-through digital wallets are in effect card payments, the same error resolution frameworks apply. From a user perspective, chargebacks are simple to request. From a merchant perspective, new programs like Visa’s Compelling Evidence and Mastercard’s First-Party Trust are allowing merchants to combat increasing amounts of fraud resulting from this consumer- centric framework.
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