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Kount Inc., a startup that specializes in anti-fraud solutions for e-commerce, is looking for accelerated growth from its alliance with Chase Paymentech Solutions LLC, the nation’s largest processor of card-not-present transactions.
The agreement, which was signed in September but not announced until this week, gives Kount access to Chase’s merchant clients and calls for Kount to recommend Chase to its own clients. Already, 20 Chase merchants are in talks with Kount, says Rob Lyons, vice president of technology alliances at Chase, in an e-mail message to Digital Transactions News.
In related news this week, 41st Parameter Inc., a Scottsdale, Ariz.-based company that offers fraud-screening tools for online merchants, said it has teamed with Toronto-based Ethoca, a company that compiles fraud-history data from a network of e-commerce vendors, to combine to market a single offering.
Boise, Idaho-based Kount, which began operations in January, offers a dynamic-scoring system that lets merchants improve the differentiation of good orders from bad and cuts down on time spent on manual review of suspect orders.
It is aiming its services at large Web merchants, especially the 100 largest by sales, according to Steve Rouse, chief operating officer at the company. In this respect, it expects the deal with Chase to reduce the time it takes to recruit new clients. “The sales cycle [with big merchants] can be long,” says Rouse in an e-mail message. “The addition of Chase Paymentech as a partner channel will significantly speed up that cycle time.”
Rouse says that, on average, merchants it has worked with so far have reduced fraudulent orders by about 30%, without increasing declined orders. A portfolio spinoff of technology developer Keynetics Inc., Kount this summer received patents for technologies that help “fingerprint” user PCs and perform so-called proxy piercing, or detecting the geographic location of users hiding behind anonymous proxies.
Lyons says Chase saw Kount’s fraud-fighting technologies as an opportunity to partner rather than build. “We have looked into developing these tools in-house, but since our sweet spot is payment processing, we needed to partner with fraud solutions like Kount,” he says.
The Kount-Chase arrangement is not exclusive. Chase works with other anti-fraud solutions vendors, Lyons says. Likewise, Rouse says Kount has teamed with other payments processors. For example, last month it licensed its device-fingerprinting and proxy-piercing technologies to First Data Corp. and its TeleCheck Services Inc. unit.
“Kount is also in discussions with various processors and gateways to provide white-label or cobranded solutions powered by Kount,” says Rouse. Kount’s service is priced per transaction, with no license fee. The transaction fee ranges from a nickel to 14 cents per risk inquiry, depending on volume.
