As we dig deeper into the value of recognizing Internet identities and its value for Merchant Risk analysis, we’ve been having reasonable success on detecting Merchant Account owners that use their own merchant account to commit fraud, or activities that violate their agreements with the Payment providers.
Take the following two examples:
1. Stealing Cards: The platform detected a set of cards within the same merchant that were being used from the same user but were previously associated to other identities for the same merchant. The platform immediately rejected the transactions and alerted our customer (the Acquirer). It end up being the merchant was stealing their consumers cards and running them through their account.
2. Personal ATMs: A scheme that seems to be taking off with the proliferation of smart phone swipers is for someone to use it as a personal ATM with lower fees. We all know how easy is to get an account with the different providers of swipers. The applicant then would use his/her personal credit card to fake a transaction through his real or fictitious merchant. The money of the transaction would go into his/her merchant account. This ends up being a much cheaper way of getting money from your credit card than it is from going to an ATM. Obviously this can be easily extended to your friends and acquaintances.
When our platform sees a transaction it establishes an identity associated with the parameters in the transaction. Depending on the historical knowledge within our database, sometimes that requires reaching out to third party providers. Only then there is an authoritative relationship among the transaction parameters that makes the identity of the internet consumer or how we call it Electronic DNA (eDNA™).
To address the cases above our Platform provides two core functionalities: the ability to recognize Internet identities and evaluate their parameters in the proper identity context; and the ability to understand who are the merchants and how to correlate all the transactions within and across merchants.
Read our previous posts in Merchant Risk.