February 21, 2023
The implementation of an anti-fraud tool in payment processors is an increasingly necessary solution in a reality in which customers can pay without a physical card and in a matter of seconds.
Payment processes, fraudsters have more opportunities to successfully carry out identity theft and, later, chargeback fraud.
For these reasons, the support of anti-fraud software becomes essential for payment processors. However, what functions do these tools have in said processors?
In the case of Bayonet, our tool is responsible for strategically complementing the payment processor or aggregator in its fraud detection work by passing the merchant's customer data through its own "filter", optimized to avoid erroneous cataloging and detect up to the finest patterns of fraud that processors cannot see.
In addition, by having a large database that is supported by a collective intelligence network, our tool is designed to detect a diversity of fraud schemes in businesses according to their sector and patterns most common, an advantage that virtually no payment processor or anti-fraud software has.
On the other hand, the absence of these advantages in the detection process can quickly lead to:
● Make cataloging errors and take honest customers away from the business
● Ignore numerous anomalies and patterns, which later become serious economic losses
● Lose the trust of customers and businesses due to insecurity processor
● Invest too many resources in your own anti-fraud system that, even so, is not effective enough
For these reasons, not having an appropriate anti-fraud ally to supply these cybersecurity needs translates into losses, insufficiency, insecurity and the use of excessive resources.
Even so, more than being a "lifesaver", this implementation also acts as an improvement for processors and aggregators.
And, despite being an improvement at the cybersecurity level, it also has a very positive impact in other areas more commercial, as it helps build customer loyalty, improves their user experience and provides a plus to services, which increases their value.
Among other benefits, the following 5 can be highlighted:
A specialized anti-fraud tool like Bayonet's can detect patterns that, in common circumstances, would be invisible to payment processors.
This is because it takes into account more data than just that provided by the processor, as it makes use of its large database of data and explores thousands of patterns in milliseconds thanks to data mining, powered by AI and machine learning.
This, in turn, allows common cybercriminals and fraudsters to be detected more easily and, consequently, their transaction is denied.
When anti-fraud software for payment processors has its own machine learning system, it is capable of adapting to new forms of fraud. This facilitates its constant updating, so that it does not lose effectiveness over time.
In Latin America, fraud evolves in a matter of weeks, so the absence of machine learning in anti-fraud software represents a clear disadvantage against cybercriminals. Also, few payment processors use it in their anti-fraud algorithms.
Generally, the same fraudster can attack many E-commerces successfully the first time, since their respective processors or payment aggregators do not have the cybercriminal's data. Therefore, the first chargebacks of new fraudulent customers usually generate irreparable losses.
Instead, with the support of a collective intelligence network like the one we offer exclusively at Bayonet, it is possible to stop a fraudulent purchase from the first moment. This is because our tool obtains data from cybercriminals when they carry out an attack and informs the entire business network so that it is warned.
Therefore, any fraudster that has been registered by the tool will not be able to carry out similar attacks on any business. belonging to the network.
A typical error in non-specialized anti-fraud algorithms of processors or aggregators is the incorrect categorization of transactions. This can lead to an e-commerce losing up to 4 times more money and resources, so optimizing this process is vital for the business.
On the other hand, anti-fraud software is much more optimized and avoids any friction with customers caused by for the incorrect denial of your purchases.
Because many experienced cybercriminals commit data theft and then make fraudulent purchases (known as proven fraud), the security of many users is also compromised.
However, a specialized anti-fraud tool can detect transaction anomalies and prevent you losses to the true customer and to the merchant due to subsequent chargebacks. This, in turn, builds trust towards e-commerce and its customers.
Insecurity in payment processors is real and often costs them loyal customers and many resources due to constant attacks, chargebacks and fraudulent purchases made to their merchants and customers.
At Bayonet we are aware of these challenges and we are interested in seeing your business grow. If you are also interested in the security of your business and in our solution, schedule a demo.