As e-commerce fraud continues to grow in sophistication, payment networks and merchants are increasingly relying on richer transaction data and collaborative fraud detection tools to strengthen authentication. The rollout of 3-D Secure enhancements by major card networks is enabling merchants to pass significantly more contextual information to card issuers, including device details, behavioral patterns, geolocation, and biometric indicators. According to research from Mercator Advisory Group, these expanded data-sharing capabilities are helping fuel the rise of consortium-based fraud prevention models that use shared intelligence across platforms to improve real-time fraud detection and authentication outcomes.
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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: e-Commerce Authorization Data: Patching the Patchwork
3-D Secure Aids New Data Consortium for Authentication & Fraud:
- 3-D Secure is being rolled out by the global card networks so that additional data can be passed from the merchant to the card issuer.
- Information such as device ID, biometrics, email, frequency, location, screen colors, IP address, language and more are now transmitted from merchant to card issuer.
- The most fertile area for consortium data among fraud platforms lie in multi-site device info, behavior, and purchasing history.
- Contributing data to a consortium for the common good runs counter to competitive mindset, but the ability to combat fraud is persuasive to merchants.
- As authentication companies build out their consortium data, Mercator expects interesting competition between vertically oriented consortiums and broad horizontal consortiums.
- Specialization by country/market and the opportunities for micro-specialization among vendors are promising.
About Report
To spin fraud detection gold from transaction data straw, you need lots of straw.
The e-commerce checkout and payment process generates masses of data with fraud detection potential for the merchant. Big data and AI-enabled analytics make instantaneous decisioning possible, but consortium-level transaction data is only partially fulfilled today. Fraud platform providers are beginning to seriously exploit the power of previously inaccessible data through customer data consortiums.