Some of the best products and services are the ones developed to meet an internal business need: An executive needs a widget, deploys a developer to make his vision a reality, and later recognizes that the widget they develop could help other businesses, too.
That scenario describes how Boise, Idaho-based fraud prevention services provider Kount Inc. launched in January 2008. The idea, says Chief Operating Officer Steven Rouse, was self-serving.
In the mid-2000s, the leaders of Boise, Idaho-based Keynetics realized the company needed some kind of fraud protection for its subsidiary, Clickbooks, a large e-book and digital product retailer.
"We figured out that fraudsters were out there, and we needed a solution to protect us from them," says Rouse. "We invested in technologies to help protect our business."
After some research and development, Clickbooks debuted its new fraud protection system, and Rouse and his partners realized their new technology could help other business owners, too.
"We had a noncompete [contract] at that time," says Rouse. "We couldn’t be in the fraud business. But that expired in January 2008, and we launched. What we had was really good, and other merchants could benefit from it."
Since then, Kount has grown to provide clients with an off-the-shelf, end-to-end fraud protection system at a fixed cost. But clients also have the ability to control their services to meet their own unique needs.
"Kount is a complete solution and not just a tool," says Rouse. The system is designed to work for a variety of businesses, including merchants, online communities, and financial institutions. "Our system is really fast," says Rouse. "When it sees an inquiry on a customer, it will run analytics and generate scores, and then send back a response to the client in about 300 milliseconds. A lot of times, we’re faster than Visa or MasterCard in terms of getting a response
Kount's focus on card-not-present technologies also opens doors for clients. "We don’t necessarily have a cardcentric model anymore," says Rouse. "Someone might accept new applications for a service or an account online, and instead of a card number they might accept a Social Security number or driver's license ID. We have to make real-time decisions about whatever they’re asking us to monitor."
Simplicity and customization also are key, especially for smaller merchants without fraud experts of their own.
"We talk about it as a single pane of glass that a merchant can use to fight fraud," says Rouse. "It encompasses not only the front-end fraud detection piece, but also a lot of times merchants will want to do manual reviews. So we roll to integrate front-end tools with manual review tools to offer a complete solution that their fraud group can work with."
Much of Kount’s growth has come through carefully forged partnerships with other payments industry providers. One example is its partnership with merchant acquirer and payment processor Chase Paymentech to provide a Kount-powered system called Safetech.
Most recently, Kount launched a partnership with LexisNexis to marry that company's verification data with Kount's fraud protection capabilities, helping them reach the next step in their business development.
"Lots of customers look to [LexisNexis] to provide information around validation, verification, and personally identifiable information," says Rouse. "That all helps with account creation and mitigating risk, and they needed to get into fraud detection." LexisNexis will start selling its
branded Retail Decision Maker, powered by Kount, in the near future.
Similar behind-the-scenes partnerships are a hallmark of Kount’s business strategy. "It's important to us to work with our channel partners to deploy our services," says Rouse. "We white-label it and give it to our partners to sell. They don't have to become experts in fraud. They just take it, brand it, and sell it."
Written by Kim Fernandez for Transaction Trends Magazine.