By Donald Bush, Kount
Like Hercules’ fight against the many-headed Hydra, fraud is an ever-evolving adversary. In our rocket-growth digital climate, collaboration among companies and organizations throughout the e-commerce ecosystem is essential to detecting and preventing fraud. This makes us wonder, if Hercules had partnered with Zeus, Wonder Woman and Iron Man to differentiate his attack and utilize their different strengths, would he have come out victorious that much faster?
In Silicon Valley, collaboration pushes forward innovation while simultaneously reducing risk, leading venture capitalists to participate in investments as syndicates. It’s no surprise that the majority of the top VC-backed exits in recent years have been companies with four or more investors.
The same approach also has yielded more effective fraud prevention. Indeed more parts of the industry are taking an active stance on such collaboration. Some fraud prevention companies operate in a silo—prioritizing the protection of their secrets rather than creating a more enhanced solution. It’s no surprise that a silver bullet in this fraud-reducing effort simply does not exist. But more data, technologies and organizations working together in concert make the difference in collaborative fraud mitigation. As has been said before, multiple hurdles standing between fraudsters and online retailers is the best way to insure optimal protection. For example, a machine-learning fraud prevention technology working with world-class acquirers, payment service providers, payment gateways, e-commerce platforms and other merchant services organizations is much more likely to detect the nuances of evolving fraud.
Fraud prevention is no longer an extra feature, but a critical function of any online merchant service provider. This means that it’s not only about providing the best service to our customers through constant development of new, patented technology but also collaborating with other fraud prevention technologies and data sources to offer the best solution possible.
Data, Data Everywhere
One of the main benefits of increased collaboration is access to more quality data. More data means more ways to verify and assess the risk posed by any transaction. As a result of the countless data breaches over the past couple of years, legitimate data points have been made readily available online so fraudsters can use authentic credentials to commit fraud. More databases coupled with strategically gathered context information from best-in-class providers, machine learning and skilled (human) professionals are going to more accurately assess the risk of transactions.
It’s also essential to have a variety of data and more ways to verify and assess the risk in transactions. Even partnering with just one additional service provider can lead to customer crosscheck with 5 billion global contact records, where more than a million new linkages among people, addresses, emails, phones, and IPs are created daily. And this is just one of many such partnerships in this growing industry.
While collaboration is critical, quality still takes precedence over quantity. Throwing a bunch of fraud prevention technologies together won’t necessarily manage risk better or thwart fraud. Rather, it’s important to partner with organizations not only where mutual benefits exist, but also where collaboration enhances the tools you already have. Recently, we’ve integrated with Chargebacks911, the first global company fully dedicated to mitigating chargeback risk and eliminating chargeback fraud, including “friendly fraud.” Our partnership gives merchants access to more best in breed solutions that work together and push for greater innovation within the industry. Other recent partnerships include WhitePages Pro and Emailage, which specialize in global digital identity and email intelligence, respectively.
Streamline and Centralize
What differentiates a quality syndicate from a piecemeal collaboration is streamlined efficiency. While there may be other third-party data applications that enhance the fraud analysis process, customers need to interact through a single platform for a more seamless, efficient experience with no delays in the checkout process. Incorporating partnerships shouldn’t complicate the process for your customers—so make sure before partnering or joining with other solutions that you have a simple and streamlined way for them to integrate.
Outside of partnerships and the technology itself, the fraud prevention industry should strive for syndicate-like collaboration and innovation via discussion. While high-profile security conferences are great and gather thousands, companies increasingly are hosting their own smaller events to offer businesses a more customized understanding of fraud within their respective industry and region. To slay the many-headed monster that is fraud, thought-provoking talks between leaders in the space, valuable discussions among peers and, of course, different technologies and sources of data working together are the necessary way forward.
Donald Bush is the vice president of marketing at Kount. He joined Kount in 2010, prior to which he worked as director of marketing at CradlePoint, a manufacturer of wireless routing solutions in the mobile broadband industry.
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.