Digital Transactions Authoritative, insightful and timely information for payments professionals
By Kevin Woodward
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Card-not-present merchants contending with the double-digit growth of e-commerce and mobile commerce often face more exposure to fraudulent transactions. Vesta Corp., an Alpharetta, Ga.-based payments-security company, says its new payment gateway vSafe can help reduce that fraud.
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The gateway offers merchants no-cost liability protection on digital goods as long as the transactions are processed, screened, and settled using vSafe, says Kevin Sprake, senior vice president and general manager of merchant services.
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The gateway relies on data from more than 1 billion transactions made among merchants that use Vesta to pinpoint potentially bad transactions. That enables vSafe to use predictive modeling to determine which transactions may be fraudulent, while also using geo-location to determine where a transaction is originating, he says. “Our dynamic models are built upon proprietary technologies, which are customized to detect data patterns that are indicative of fraud in specific industries or sectors,” Sprake says.
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Vesta uses an interchange-plus model for transactions made on the vSafe gateway, which incorporates variables such as the merchant category code, risk underwriting, volume, and merchant history, he says.
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Vesta’s vSafe is among the newest of such services, a manifestation of the growing size of e-commerce and the criminals it attracts, says Julie Fergerson, senior vice president of industry solutions at Ethoca Ltd., a Toronto-based provider of anti-fraud technology.
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Criminals are navigating to card-not-present merchants, especially in the United States, because they are easier targets than card-present merchants are, Fergerson says. Aggravating the situation is that the United States has yet to migrate to the Europay-MasterCard-Visa chip card standard that aims to reduce counterfeit card use at the brick-and-mortar point of sale. When it does, which is expected to begin in October 2015, criminals also will shift and target e-retail, which EMV does not address. “Right now, the U.S. is getting more fraud attempts,” Fergerson says. She expects those attempts to increase following that date.
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Card-not-present merchants are starting to care about this, she says. “I continue to tell merchants it’s really important to improve your fraud tools and stay current,” Fergerson says. “We’re going to see more attempts and more new technologies try to get through the system.”
That not only encompasses staying abreast of technology, but being more attuned to the constantly changing behavior of criminals, she says. “The crooks always go to the path of least resistance,” she says.
