FIS has announced it has reached an agreement with Forter to help provide a new chargeback indemnification service for cryptocurrency brokers and exchanges on Worldpay. Forter is a leading eCommerce Fraud prevention solution. It uses its combination of AI, vasts data sets and human intelligence to analyse and highlight fraudulent transactions in seconds as Enterprise Times recently reported on.
With fraud instances expected to rise during the COVID-19 pandemic, Worldpay has launched Fraud Freedom, a service that will provide indemnification for fraud-related chargebacks. Fraud Freedom will help crypto brokers and exchanges optimise payment conversion and authorisation rates. More importantly, it will validate those transactions in real-time using the Forter platform. Integration with the crypto exchanges, the Forter solution will help validate transactions. It eliminates the need for time-consuming and costly manual transaction reviews.
Shane Happach, EVP, Head of Global eCommerce, Worldpay Merchant Solutions, FIS commented: “The cryptocurrency market is growing rapidly, which is exciting to see, but the reality is that it is a high-risk sector for fraud that demands innovative solutions. By combining with Forter’s market-leading network- and AI-based fraud prevention system, FIS can help its cryptocurrency clients shift from a niche market to the mainstream while maintaining high standards of security.”
Digging deeper into Fraud Freedom
Enterprise Times asked Michael Reitblat, CEO, Forter about its involvement in Fraud Freedom and how it works. Worldpay customers will have to decide as to whether they want to utilise this new service. Reitblat believes that it will cost “a small percentage of the $ value of each transaction.”
Forter is not integrated into Worldpay but the different crypto exchanges that its customers use. It means that as customers use the crypto exchange, Forter validates the transactions and flags if it is potentially fraudulent. This decision is based on the Forter networks knowledge of such transactions. Reitblat explained further saying: “The end merchant takes on the cost of the service, which provides fraud prevention, increases in approvals, and indemnification for fraudulent chargebacks.”
What Reitblat was unclear about was the amount of fraud that Worldpay previously experienced. He was therefore unable to share what Worldpay might save as a result of this service.
Finally, why Forter? Reitblat commented: “Worldpay chose Forter based on the need for an innovative solution capable of meeting the demands of a high-risk sector like Cryptocurrency. Forter’s market-leading network, AI-based fraud prevention platform, and its ability to improve approval rates, prevent fraudulent transactions, and provide indemnification for fraudulent chargebacks were all drivers of Worldpay’s decision to partner with Forter.”
Enterprise Times: What does this mean
The cryptocurrency market continues to grow. In 2019 alone, trading volume grew by 600% and the market cap closed the year at $180 billion. (Source CoinGecko Yearly Report for 2019). Bitcoin still dominates the market, but there are a host of other cryptocurrencies, some of which are fraudulent. Brokers want to ensure that their transactions are both secure and frictionless with prices rising and falling quickly.
Reitblat commented “Fraud protection in general, and especially in high-risk industries, must be highly adaptive and nimble. This can only be achieved when an AI-based system, which can learn from a vast number and diversity of transactions, is combined with proactive research and expert insights. “
Fraud Freedom is not the only fraud protection scheme for cryptocurrency. Last year Elliptic partnered with Wirex. However, Forter has the experience and a huge eCommerce transaction database. It will now add even more transactions and thereby knowledge to it. Worldpay processes more than 15.7 transactions every year. Its parent organisation, FIS, processes more than 75 billion transactions and moved $9 trillion around the globe.
As Reitblat noted: “Working with Worldpay to bring Fraud Freedom to the cryptocurrency market lets us leverage the strength of our system in a potent arena for fraud, which, in turn, strengthens our system with a broader array of payments data insights with a continuous feedback loop.”
If the new service is successful, Forter will have gained a considerable foothold in a new market, one that it will be hard to dislodge them from. Worldpay, customers and Forter all seem to benefit from this deal. It is probably at the expense of fraud actors who may turn to easier pickings.