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By linking directly to UnionPay’s SecurePlus two-factor authentication application, digital-commerce platform provider Merchant e-Solutions Inc. expects to significantly reduce decline rates for UnionPay debit card transactions in the United States.
Decline rates are an especially nettlesome issue for UnionPay debit card holders, who account for about 60% of UnionPay’s 9 billion cards, as debit cards can only be used in the UnionPay network and in networks that have direct links to UnionPay, such as Payscout LLC, which is the engine behind SecurePlus. Overall, decline rates on UnionPay credit and debit cards can be as high 70%, depending on the type of transaction, the network being used, and whether two-factor authentication is involved.
UnionPay is a China-based financial-services corporation headquartered in Shanghai that issues credit and debit cards. Alpharetta, Ga.-based Merchant e-Solutions is also known as MerchantE.
By linking directly to UnionPay SecurePlus, MerchantE will open access to UnionPay acceptance to its nearly 20,000 merchants, which will have the option to offer UnionPay as a payment method. With SecurePlus, these merchants can increase approval rates from 30% to 90%, according to MerchantE.
More than 145 million UnionPay cards are in circulation outside of China. Worldwide, UnionPay cardholders generate $14.3 trillion in annual sales.
“Linking directly to UnionPay will pave the way for merchants on our platform to attract new customers,” says Sandra Blair, executive vice president and chief product officer for MerchantE.
To reduce the risk of fraud and chargebacks, SecurePlus requires two-factor authentication. After a UnionPay cardholder initiates an online transaction through SecurePlus, she receives a text message with an authorization code to be entered on the checkout screen to further authenticate her identity.
“UnionPay’s two-factor authentication reduces the risk of fraud for merchants and increases approval rates,” says Blair, who adds that recurring transactions need to undergo two-factor authentication when the payment is set up. Transactions initiated using SecurePlus settle in about two days compared to five days outside of the authentication routine.
“Through the SecurePlus solution, merchants can achieve unprecedented revenue growth, while taking advantage of exclusive features such as instant onboarding, faster settlement, and enhanced security, which means more transaction approvals and less fraud,” Manpreet Singh, president and co-founder of Sherman Oaks, Calif.-based Payscout, said in a prepared statement.
