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How Big Data Helps Protect Even the Smallest Merchants Against CNP Fraud

posted on: Tue Sep 23 2014

The benefits of Big Data were once reserved only for Big organizations with Big IT budgets. Big merchants. Big processors. Big gateways. But that’s no longer the case. Kount brings the power of Big Data to even the smallest merchants. This blog post focuses on one specific technique for leveraging Big Data: Personas.

PlanetPersonas use Big Data to help you fight first-time fraud better than ever before. Why is this important? For the next few months—including the holiday selling season and Cyber Monday—fraudsters will be armed with “weaponized” data acquired as a result of Home Depot's record-breaking breach (as well as other breaches that haven't received big headlines). Fraudsters will not only have stolen credit card information, but possibly credentials like email addresses, billing ZIP Codes, telephone numbers, PINs and other information which will make it virtually impossible to detect fraud in card-not-present transactions. Unless you have Kount on your side. We use Big Data to build Personas that help protect you against even first-time fraud. Here’s how:

  1. Big Data. Kount examines millions of CNP transactions every day (more than just about any individual merchant, processor, or gateway). That’s a lot of data. And as we flag the tens of thousands of CNP fraud transactions that take place each day, we leverage this Big Data to build models of the behaviors and attributes that are associated with actual fraudulent transactions. We then apply these models—called Personas—to all other transactions we examine.
  2. Personas. Hundreds of actual behaviors and attributes go into building Personas in real-time. For example, if Big Data reveals a higher incidence of fraud when a single credit card is used by multiple devices, that information goes into building a Persona. If use of a credit card at the same time but in different geographies results in higher-than-average fraud, that behavior contributes to the Persona. Or if a credit card exhibits higher levels of fraud when it passes through multiple proxy servers, Personas factor that in, too.
  3. Better Protection Against First-Time Fraud. If you’re a small merchant who sees only dozens or hundreds of transactions each day, the odds are stacked against you when it comes to detecting a first-time fraudster. Even larger merchants that process tens of thousands of daily transactions are at a disadvantage. But with Kount Personas working for you, first-time transactions that show no history of fraud but exhibit the behaviors and attributes identified with fraud through Big Data will have their Kount Score adjusted, alerting you to the fact that additional action is required before you approve the order. It may be as simple as putting a one-day hold on fulfilling the order (while Kount Dynamic Scoring and Rescoring follows that card to see if over the next 24 hours it engages in fraudulent transactions). Or conducting a manual review. Whatever the action, you’ll have a much higher likelihood of avoiding first time fraud…even by fraudsters armed with “weaponized” data from the latest series of breaches.

Cyber Monday is coming. And with 2.29 billion transactions projected, the risk of first-time fraud will be higher than any other day of the year. Fortunately, it’s still not too late to protect yourself. Attend our webinar "Fraudsters Are Ready for Cyber Monday, Are You?" and learn how you can be protected with Kount Personas.