The battle against payment fraud really is a war and must be fought like one: Au10tix

Identity verification providers presented two marketing mindsets this week. The more predominant one was confident business as usual but the other was a sober realization of “stark” industry realities.

The business-as-usual crowd included Mastercard, whose market share has grown incrementally; Entersekt, which is buying market share; and the U.S. Payments Forum, whose members are weighing multi-factor authentication.

On the shaken side of things is automated ID-verification service firm Au10tix.

The company concluded its third-quarter identity fraud analysis by admitting that “we are confronted with a stark reality – the prevailing, oft-cited 1% fraud rate is a mere surface-level glimpse into the expansive world of identity fraud.”

Au10tix endorsed a higher range for ID fraud – three to 10 times that number.

What is more, the company says there can be no significant improvement in crime so long as the industry is “fixated on individual cases,” a strategy that misses by a wide swing the wholesale, “orchestrated efforts of organized crime.”

It labeled information verification as “superficial.” Fraudsters are playing three-dimensional chess and the anti-fraud community is just now assembling checkers pieces.

An article about payment-processor Mastercard’s growth in the trade publication Payments Dive notes the company’s focus on biometric authentication and other tactics.

Biometric authentication is seen as an anti-fraud tactic, of course, but it’s discussed more in the context of opening new markets to Mastercard.

In the case of authentication firm Entersekt, executives are counting on the new anti-fraud products they acquired this week with the acquisition of competing and complimentary software and services from payment-services firm Modirum.

Entersekt picked up the cloud-based 3-D Secure software line and with it the buyers. The line secures 2.5 billion transactions annually, according to Entersekt.

It’s a valid tactical market move, but from a product standpoint it perpetuates the industry strategy of preventing fraud one consumer at a time.

Entersekt CEO Schalk Nolte, in a statement issued about the acquisition, said, he can now “offer a wider set of solutions and provide our customers with more data sources to use when protecting against fraud.”

Meanwhile, some members of the industry group U.S. Payments Forum are still acclimating to biometric tactics and strategies. A session during the recent group’s fall member conference, vendors debated the benefits of biometrics for payments.

A summary of the conference by the forum found that “card issuers are already seeing the benefit of reduced fraud with biometric transactions.” And yet, the majority of the summary focuses on how biometrics improves customer experiences.

That observation is supported by recent research, but the group seems to think of biometrics and AI as an amorphous concept to acknowledge. Au10tix’s point is still valid. Some in the industry seem comfortable addressing digital ID fraud as a scourge to be chipped away at rather than a broad, growing and changing threat.

Article Topics

AU10TIX  |  biometric payments  |  biometrics  |  Entersekt  |  fraud prevention  |  Mastercard  |  Secure Technology Alliance