Digital Transactions Authoritative, insightful and timely information for payments professionals
Short-message service, or SMS, is coming to the aid of fraud managers looking to verify the identity of persons on the receiving end of payments transactions. The technology, which undergirds the well-known texting function between users of mobile phones, can be harnessed to stop fraud, according to security firm DataVisor Inc., which said early Monday it is working with SMS app provider Twilio Inc. to do just that.
Mountain View, Calif.-based DataVisor says that in cases where its machine-learning technology suspects fraud, a bank or business can send a text message that could incorporate a “challenge” to an end user to verify his or her identity before a client or the business sends a payment. Fang Yu, co-founder and chief product officer at DataVisor, says in a statement that the integration of SMS verification, should offer protection “against constantly evolving threats.”
The addition of SMS messaging complements other technology, such as artificial intelligence, that the company has incorporated to battle fraud. It also claims SMS verification should “simplify” routines businesses must engage in to prevent fraud before sending funds.
San Francisco-based Twilio offers an API that supports voice communication as well as SMS apps for businesses seeking to communicate with customers or users. In its previous venture in payments, it paid $32.3 million early last year to buy Boku Identity Inc. from the mobile-payments platform Boku Inc.
Also last year, DataVisor agreed to provide technology to help Galileo Financial Technologies LLC detect fraud in payments beyond credit cards, including debit cards and transfers on the automated clearing house network
Information was not immediately available regarding pricing for the new DataVisor-Twilio service.
Identity theft has hit major corporations as well as small companies and individuals. Apple Inc. in May reported it had stopped more than $2 billion in fraudulent transactions in its app store last year. Overall, cases of ID theft in the United States soared during the pandemic, growing from 650,000 in 2019 to 1,435,000 in 2021, according to the Federal Trade Commission. That number has moderated somewhat since, but stood well above 1 million last year.
