The Real-Time Fraud Intelligence Factor

“Who’s on First” was funny when it was an Abbott & Costello skit about baseball player nicknames. But for merchants who really need to verify whether the person at their virtual front door is really a legitimate customer, getting a straight answer in a matter of seconds is essential.

The power of real-time customer data can not only help know your customer (KYC), but actually go further to identify and verify customers as well as the customer (i.e., merchants) behind the customer, Merlin Bise, cofounder and CTO of GIACT, explained.

It goes beyond just KYC, Bise told Karen Webster, because given the rise of PayFacs, merchants today also have to know who their consumer’s customer is. Real-time data, he believes, can help the merchant be much more effective.

“It’s where payments has to go,” Bise said.

The Frictionless Balancing Act

Without, of course, introducing friction into the consumer experience.

According to Bise, Amazon is an example of a responsible company — they’ve clearly done a good job of eliminating much of the friction for their consumers across channels. However, even Amazon will have to continue to take it further as time goes on for one simple reason: What’s working today will not be enough for tomorrow— technological advances continue to grow and cybercriminals constantly adapt and change their strategies.

While many companies have enough analytics, pattern recognition and science behind their data to feel confident on their decision making, Bise said more will be needed to stay one step ahead of them.

That’s where real-time intelligence comes in.

GIACT supports the ability to use real-time authentication of devices by pinging a device that’s being used and then verifying it while the transaction is happening. GIACT elegantly folded in the ability to authenticate the customer to drive trust, confidence and loyalty.

“That’s really what a lot of these companies are working toward,” Bise explained. “The last thing we want to do is make the bad guys smarter, and one of the ways you combat that is real-time intelligence on the device and the customer. Our integration is easy and offers a multitude options. This allows merchants to build solutions that support decisions now and in the future at the speed of commerce.”

For example, Bise said it’s also crucial to vet merchants themselves, by authenticating factors such as business licenses, ensuring the company has a valid phone line and checking identity — all of which can be done in as quickly as 280 milliseconds.

Verifying The Digital Handprint

Verifying a consumer’s digital fingerprint, which is composed of their online activity, may no longer be enough either.

Companies must be able to look at the bigger picture when authenticating users online, such as their digital activity, identity and interactions, said Bise. This makes up what he calls a digital handprint, which GIACT can compile by leveraging social and email intelligence, as well as looking at a device in real time.

“Most people are just looking at one aspect, [but] we’re looking at five key different pieces: the identity, email and social intelligence, mobile, financial data, and additional checks on AML,” Bise stated.

For the customer, there’s no friction because no additional software is needed on the device itself for authentication — GIACT simply sends a ping to the device and receive a response back that the device is active and belongs to the person attempting to make a purchase.

He explained that being able to fully authenticate a device and confirm that it matches the legitimate user’s email and social intelligence — all within a half-second or less — is a huge win.

The Real-Time Difference

“That’s real-time intelligence,” Bise stated. “It’s fact-based, and it allows for a safe transaction.” He noted that it also provides zero friction to the customer so that there’s a higher level of confidence with that merchant from the customer’s perspective.

But with an ever-increasing amount of compromised data flooding the market — just think about the Yahoo breach that left the sensitive data of 500 million user accounts exposed — it’s a challenge to stop hackers from using this information to pose as legitimate customers.

Bise said it starts with ensuring that hackers can’t get their hands on data in the first place, by using platforms that are architected to prevent data from being stolen, harvested and sold.

The one-way encryption of GIACT’s platform is built for in and not out. Once data is received, a fact-based decision is given back to the merchant, but all of the sensitive components of the data are fully encrypted and no one can see them, meaning there’s no way for it to be pulled back out, Bise explained.

Safety In Numbers

It’s clear that as payments get faster and technology advances, fraud is moving at the same speed.

Although keeping up with fraud may not be a job that anyone can successfully do on their own, Bise explained that one of the biggest issues will be interoperability among faster payments players.

GIACT is working to facilitate a gateway solution that will enable its merchants to have access to various channels across the industry, but there are challenges that lie in facilitating that collaboration.

Solving the fraud problem will require communication across the industry, said Bise, which is why GIACT is trying to help faster payments stakeholders understand the importance of working together instead of competing.

If interoperability can become a reality, a true payments platform could be established, one that not only drives payments innovation off the charts but is also best for the customer, Bise said.

“What everybody needs to do in payments is build strong relationships with other excellent companies and pay attention when people are talking — whether they think it’s super important or not,” he noted. “There’s always an opportunity to gain new insight if you do that.”