How Platform Technology Helps Mitigate Payments Fraud

The digital age has brought about a transformation in the payment system; nevertheless, along with convenience comes uncertainty. Companies that process payments are always on the watch for dishonest individuals who are hiding in the shadows of the internet. When it comes to their arsenal, platform technology emerges as a potent weapon in this particular situation.

Historically, payment processors have relied on rule-based algorithms to identify transactions that appear to be suspicious. It is possible that these rules will check for things such as unexpected purchase amounts, anomalies in billing addresses, or a sudden rise in activity from a new area. Fraudsters who modify their strategies are able to circumvent static restrictions, despite the fact that these rules are effective to some degree.

Platform technology provides a dynamic approach to the prevention of fraudulent activity:  

– Use of ML and AI: Through the utilization of machine learning algorithms, platforms are able to evaluate huge amounts of transaction data. These algorithms have the ability to recognize intricate patterns and irregularities that may be able to circumvent static restrictions. Over time, artificial intelligence has the ability to further develop these models by continuously learning and adapting to new fraud strategies  

– Communication of threat in real-time: Platforms make it possible for processors, banks, and other financial institutions to share threat intelligence in real time with one another. Through the use of this collaborative method, they are able to swiftly discover new fraud schemes and put preventative measures into place before the schemes become popular  

– Network examination: In order to uncover potentially malicious connections between accounts or devices, platforms are able to conduct comprehensive analyses of entire networks of transactions. Using this method, it is possible to uncover concerted attempts at fraud that may involve several accounts or stolen identities  

– Frictionless authentication: Platforms make it possible to incorporate more sophisticated authentication methods such as behavioral biometrics and multi-factor authentication. Not only do these measures give an additional degree of security, but they also prevent legitimate clients from experiencing any unwanted friction  

– Data domination: By analyzing transaction patterns and identifying anomalies, platforms can proactively detect and prevent fraudulent activities. This becomes an important feature because payment frauds affect both sides of the ecosystem – merchants as well as consumers. Comprehensive data analysis also enables platforms to assess risk profiles of merchants and consumers, and make informed decisions about accepting or decline transactions  

It is possible for payment processors to achieve a considerable competitive advantage in the battle against fraud by adopting platform technology:   

– Platforms go beyond only reacting to efforts at fraud by implementing a feature known as “proactive detection.” Their ability to proactively identify and flag questionable activity allows them to prevent any damage from occurring  

– Machine learning algorithms can be fine-tuned to discern between legitimate and fraudulent transactions, hence minimizing disruptions for legitimate consumers. This results in a reduction in the number of false positives  

– When it comes to scalability and agility, it is possible for platforms to manage enormous amounts of data and to adjust to ever-changing fraud trends, which guarantees long-term security  

A rapid transformation is taking place in the landscape of fraud protection for payment processors as a result of platform technology. On account of the fact that these platforms are becoming increasingly intelligent and collaborative, the capability to recognize and foil attempts at fraud will continue to advance. All parties involved will ultimately benefit from a digital payment environment that is safer and more secure. 

Which brings us to FSS BLAZE™ – a state-of-the-art, new-age payments technology platform. FSS BLAZE™ has a multi-layered architecture that decouples core services for modular development, easy upgrades and integrations. 

Find out more about FSS BLAZE™ here. 

To understand the role of technology platforms like BLAZE™ in the payments industry, download our whitepaper – Reimagining Payments – The Platform Way.