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CyberSource leverages Visa’s transaction data to boost its fraud detection
Doing so has helped improve CyberSource’s ability to detect fraud by 35%.
E-commerce fraud control provider and Visa Inc. subsidiary CyberSource Corp. says it has improved the effectiveness of its Decision Manager offering by 35% after integrating data from Visa’s global payment network. CyberSource has added to its risk-scoring system the payment network’s Advanced Authorization score, which Visa card issuers use to determine the fraud risk of each transaction.
“In fraud prevention data is critical,” says Andy Naumann, director of product management, CyberSource risk solution. “The more data you have, the more patterns you can see and the better we can uncover potential fraud.”
After Visa’s $2 billion purchase of CyberSource last year the two companies got together to determine how they could leverage each other’s antifraud expertise, says Naumann. But with their different orientations when it came to risk scoring, they weren’t sure that there would be much of an effect, says Naumann. CyberSource focuses on e-commerce while Visa, despite authorizing millions of online transactions, is primarily focused on bricks-and-mortar businesses.
But despite those differences, integrating the two companies’ data, including the more than 60 billion Visa transactions that CyberSource processes annually, enabled CyberSource to produce a new score that is 35% more accurate than CyberSource’s previous Advanced Fraud Score. That percentage was determined by testing the enhanced scoring system against the previous method.
CyberSource’s Decision Manager tool allows a retailer to automate most of its fraud management after it inputs a variety of acceptable criteria, such as the lowest acceptable risk score and highest acceptable order value.
When a retailer receives an order, the Decision Manager correlates the attributes of the order against information about the device used to make the purchase, and data and validation tests generated from transactions processed by Visa and CyberSource. The system compares the results to the rules set by the merchant and then routs the order for fulfillment or suspends it for manual review.
CyberSource began offering the enhanced service last month as a standard feature in its Decision Manager at no additional charge to merchants.
The enhanced risk-scoring service is one of the first major jointly developed products launched by CyberSource since Visa acquired the fraud control provider.
Scott Boding, director, order screening, at Cybersource, will speak at the Internet Retailer Conference and Exhibition 2011 in a session entitled "10 low-cost, little-noted payment fraud-fighting and cost-saving ideas."