E-commerce merchants using CyberSource for payment gateway and risk management solutions now have another tool in their antifraud toolkits: an alert service that helps identify fraudulent transactions prior to order fulfillment.
Additionally, Ethoca’s merchant base (whether using the CyberSource gateway or not) will benefit from the more robust alert service, which has been reciprocally enhanced with Visa’s fraud intelligence. The idea is that many cardholders detect and report fraudulent activity on their accounts as soon as they notice it in their account records, usually before the transactions settle, through online and mobile banking apps. Once informed, card issuers report fraudulent transactions to the card networks, which then update Ethoca’s alert service, which disseminates the alert to the merchant who accepted the transaction being reported as fraudulent.
An excellent instance of the collaboration extolled in Mercator Advisory Group’s report, Card-Not-Present Risk Management Across the Value Chain.
The service is intended to help merchants reduce fraud losses and associated chargeback costs. The Visa-enhanced service is currently available to U.S. and Brazil merchants through Ethoca and also through CyberSource, a leading global payment management company and wholly-owned subsidiary of Visa Inc.
Using near real-time information from Visa on confirmed fraud transactions, Ethoca is able to send secure alerts to the affected merchants in the critical 24-72 hour window between when eCommerce orders are placed and when they are fulfilled or shipped, a significant reduction in time from the current average of three to six weeks it takes for merchants to be notified.
The offering compares transactions from Ethoca’s merchant customer base against fraud data sent by Visa and participating issuers. In the event a purchase is confirmed as fraudulent, Ethoca’s platform immediately notifies the merchant through its alerts dashboard. This early warning gives merchants more time to stop the fulfillment process, limiting fraud losses. An analysis of past transactions suggests Ethoca Alerts enhanced by Visa data could help prevent $300 million in fraud annually.
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