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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: e-Commerce Authorization Data: Patching the Patchwork
Rediscovering the Consortium with Authentication Data:
- Acquirers, gateways, and fraud platform providers are differentiating their fraud services by using a consortium of data.
- They advertise the dataset to merchants to provide confidence that they can optimize authorization rates and increase merchant revenue.
- Data collected by a merchants fraud platform might include: device fingerprint, behavioral biometrics, shopping history, and shipping & payment data.
- The race to collect data across merchant locations is the most obvious method to improve the accuracy of the fraud detection platform.
- Within the payments ecosystem, merchants and card issuers have access to comparatively more data than acquiring banks and card networks.
- Merchants carry the shopping/device/behavior for their site, while card issuers fill in the data on other sites. The fraud platform combines them.
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.