bad Credit

4 fraud-fighting techs make online shopping and banking safer

4 fraud-fighting techs make online shopping and banking safer
Written by Publishing Team

Online banking and shopping have never been more popular, thanks to the global pandemic and the convenience of getting these tasks done 24/7 from home.

Unfortunately, the rise in transactions came with an unwelcome companion: a rise in fraud.

Online fraud involves false or illegal transactions using stolen payment or identity information. There is also “friendly fraud”, in which the customer instructs the payment provider to cancel payment on a received good or service, resulting in costly merchant chargebacks.

Experts estimate that online retailers spend 7% of their annual revenue dealing with an average of 10% of fraudulent transactions. The industries most affected are airlines, computer/electronics retailers and money transfer services.

Fraud also harms consumers because anti-fraud measures can slow down or even stop honest transactions. Residents of countries with a high rate of fraudulent transactions may find themselves blacklisted from frequently burned online retailers and financial institutions.

Several Israeli companies have developed advanced anti-fraud techniques to protect both sides and simplify the elimination of bad actors. Here we review four of them.

dangerous

As noted above, friendly fraud occurs when consumers object to a fee for something they received, rather than returning the item. Perhaps their child bought it without their knowledge or perhaps it was an impulsive purchase that they later regretted.

In either case, the merchant is subject to a chargeback fee unless they can prove that the purchase was legitimate. Last year, the friendly fraud cost merchants around $125 billion.

Founded in 2013 by Edo Gal and Assaf Feldman, Rescued offers a unique chargeback guarantee. Today, it works with three of the top 10 e-commerce companies and has processed over a billion orders.

Elad Cohen, Vice President of Data Science for Risk. Photography by Saral Gaur Lavi

“When the request information reaches Riskified in real time, we decide within a second or two whether to accept or reject the request, using sophisticated machine learning models,” says Elad Cohen, Riskified Vice President of Data Science.

“We only get paid for the orders we accept. If we get it wrong, we pay the full chargeback.”

Cohen says Riskified cuts fraud-related costs in half. “Our fee is much lower than the chargeback fee and they don’t have to pay someone to do it internally.”

But the main advantage is that the automated process of Reskived increases application approval rates by up to 20%. That’s because human risk assessors tend to fall on the safe side, rejecting suspicious transactions or even blacklisting entire countries.

“For customers, we make e-commerce more accessible,” Cohen says.

For merchants, additional services include using data to build a case for banks to object to friendly fraud, determining if a customer is abusing free returns or special offer privileges, and more.

Employees at risk in front of the New York Stock Exchange. Photo by CRC Media

With more than 650 employees — two-thirds of them in Israel, the rest in New York and smaller branches around the world — Riskified went public last July and works with clients including Acer, Trip.com and Ticketmaster.

Just

Justt is another Israeli startup that helps global merchants combat false chargebacks using smart technology.

Founded in 2019 as AcroCharge, Justt uses machine learning and industry-specific technology to report incorrect chargebacks and create customized solutions to collect and present evidence on behalf of merchants.

The company says its fully automated approach eliminates 85% of friendly fraud while eliminating the need for in-company chargeback mitigation programs.

The founders of Just Ophir Tahour and Rowen Ben-Ami. Image courtesy of Jost

Founded by Israel tech industry veterans Rowen Ben-Ami and Ofir Taher, Ghost recently raised $70 million in funding as it expands, and now has about 110 employees.

One of Justt’s clients, digital payments giant Melio, reported that its mitigation team was able to recover about 30% of false chargebacks before the automated solution was implemented. Then the success rate tripled.

“Just’s laissez-faire solution integrates with our card processor, allowing us to shift our focus from the never-ending task of combating chargebacks to achieving our core business objectives,” said Matana Surif, Milio Vice President of Risk and Compliance. Justt customers only pay a fee after a refund.

“The chargeback system is fundamentally unfair, but many merchants view their losses as just a cost of doing business. At Justt, we believe there is a better way, and that e-commerce sellers need someone in their corner as they navigate this legacy system,” he said. Taher, CEO of Justt.

Beukac

Cybercriminals are increasingly trying to take the elderly out of their life savings, taking advantage of the lower level of digital intelligence of the elderly.

Using phone calls or text messages (to mask unfamiliar voices) pretending to be a grandchild in need of emergency cash, they might steal identity information to open a new account or convince the victim to log into their bank account and then seize it.

After determining that 40% of confirmed fraudulent credit card applications involve a person aged 60 or older, BioCatch recently launched an age analysis fraud prevention solution for more than 50 large financial institutions.

BioCatch was founded in 2011 based on military machine learning technology to authenticate identities using behavioral biometrics – how you type, move your mouse, or manipulate your smartphone. Even slight differences in behavior indicate the presence of a hacker, not the account holder, at the keyboard.

BioCatch VP Cyber ​​Oren Kedem. Image courtesy of BioCatch

“When you apply to open an online bank account, you write a lot of information. The cadence of writing varies if you’re doing it from memory or looking at a piece of paper,” says BioCatch VP Cyber ​​Oren Kedem.

Knowing that typical cybercriminals are much younger than their victims, BioCatch taught its age analysis software to flag behavioral biometrics that did not match an applicant’s alleged age.

“We know how a person born in 1949 behaves online and how a person born in 1989 behaves online. If there is a mismatch, we alert the customer. We see that age detection is quite accurate,” says Kedem, especially when someone tries to unlock new account.

We are not actively stopping anything. We do not recommend bad guys. We collect data invisibly and provide insights that allow the customer to decide whether to accept or decline or require the applicant to contact customer support.”

BioCatch has more than 200 employees, with research and development in Israel and offices in North and South America, Europe, Asia and Australia.

Identic

Identiq was created in 2018 with the idea of ​​creating a peer-to-peer network that would allow merchants to verify the identities of new users.

Identiq CMO Shmuli Goldberg. Image copyright Identiq

“Let’s say you sign up for a ride-sharing service. They put you in a car with a stranger and they need to know you’re who you say they are,” explains chief marketing officer Shmuli Goldberg.

“Aside from the risks of credit card fraud, account takeover, and identity theft, it’s also a matter of trust and security. If you can be sure it’s a real person, a huge amount of fraud and bad people problems go away,” says Goldberg.

“We do this by enabling our customers to verify your identity with companies that already know and trust you and have your IP address and credit card number, such as a video streaming service or grocery delivery company.”

The algorithm powered Identiq solution keeps user details anonymous and is both GDPR and CCPA (California Consumer Privacy Act) compliant.

“We use multilateral arithmetic, a well-known branch of cryptography that makes sure we can perform a calculation on the data that we both have without either of us exposing that data to each other,” Goldberg tells ISRAEL21c.

Working under the covers during the registration process, a scalable Identiq solution can handle hundreds of millions of queries simultaneously and in real time.

“Trusted users get a completely seamless experience. They are not treated as scammers, there are no more validation numbers or one-time verification fees. In the 1% where something doesn’t match, we alert the customer that we haven’t seen this person with a credit card before.”

Identiq primarily operates in large B2C segments such as trip sharing, financial services, retail, travel, gaming, dating sites, and social media.

“We can be used not only in account creation, but also before a customer places a huge order, or reactivates an existing account. A good user is expected to have a range of companies across industries that know their username, email address, and phone number,” Goldberg says.

About the author

Publishing Team

Leave a Comment