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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: e-Commerce Authorization Data: Patching the Patchwork
Commerce Authentication Data Becomes a Focus in 2021:
- Merchants fight a constant battle to offer frictionless consumer buying, requiring a seamless authorization process, while preventing fraud.
- Beyond the simple fraud risk, merchants incur significant penalties with the payment networks if they allow too many fraudulent charges.
- Often, what differentiates one authentication implementation from another is the set of transaction data being examined for authentication.
- Consortium data may be the frontier of improving analytics as companies combine multiple merchants, acquirers, networks and card issuer data for the next level of accuracy.
- In addition to authorization, managing disputes post-purchase is receiving increased attention in 2021. Merchants use multiple platforms to cover multiple authentication & fraud challenges.
- Both acquirers and payment gateways have stepped up their in-house authorization solutions using AI & Machine Learning connected to rules engines.
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.