Predictive analytics and decision management software company FICO has partnered 41st Parameter - an online fraud intervention company - to fight fraud on card-not-present (CNP) transactions, which are the top source of payment card fraud today.
According to its media statement dated June 11, 2014, FICO is integrating 41st Parameter's TrustInsight with its FICO Falcon Fraud Manager Platform. The TrustInSight solution provides a real-time analysis of a transaction-crowdsourced from a network of merchants-and produces a TrustScore, which signals whether the transaction is likely to be genuine, and should be approved, or not. It also reduces the number of "false positives", which refers to good transactions that are declined or investigated by the card issuer.
With TrustScore integrated within the FICO Falcon Fraud Manager Platform, a link is provided between data the merchant knows and data the issuer knows. This is to let issuers utilise additional information that is not currently available in their fraud detection process, such as the identification of a cardholder's "trusted devices."
For instance, if a cardholder is on vacation and tries to book a flight online, Falcon Fraud Manager's advanced analytics might rate this as a suspicious transaction if the location and value were unusual for the cardholder. In addition, TrustInsight has the ability to identify if the cardholder is using his or her own mobile phone for the transaction; and if so, it increases the authenticity of the transaction.
TJ Horan, vice president for Fraud Solutions at FICO, said that the future of payments is online and mobile, where the card is not present.
"Integrating 41st Parameter's TrustInsight technology with the FICO Falcon Platform score will enable issuers to increase the approval rate, and corresponding revenue for CNP transactions," he said. "With TrustInsight, we believe issuers can recover more than 30 percent of transactions declined for fraud reasons that are actually false positives. The entire online commerce ecosystem will benefit, including significant improvement in customer experience, added consumer confidence, and additional revenue for merchants and issuers."
"Most companies just don't know their online customers, and if you can't recognise your customers, how can you authorise transactions?" added Ori Eisen, founder and chief innovation officer at 41st Parameter. "41st Parameter advanced technology provides FICO's worldwide Falcon customers, and their cardholders, additional protection against today's biggest card fraud threat."
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