First Data is to integrate HNC’s eFalcon internet fraud detection service into its e-commerce offerings, to lower credit card fraud losses.
First Data is marketing the service, under the name FraudTrap, to its financial institution clients and technology partners, to re-brand as a value-added offering. Using neural network and scoring-based technology, the service enables merchants to identify possibly fraudulent online shopping transactions.
Meridien Research projects the cost of Internet payment fraud to soar to $60 billion by 20051. Because merchants are responsible for all costs incurred with fraudulent online transactions, they often mistakenly abandon legitimate sales due to perceived high risk. By teaming with HNC, First Data will help merchants avoid fraud and reduce the need for them to abandon good sales, helping to generate incremental revenue.
John Duncan, general manager of internet commerce at First Data said that FraudTrap is the first component in what will be a suite of internet fraud tools, with the ultimate goal of guaranteeing payments.
First Data provides merchant processing services to more than 2 million brick-and mortar locations and over 95,000 online merchants. In 1999, First Data processed more than 6 billion credit, debit, and stored value card merchant transactions representing nearly $330 billion in sales volume.
More than 100 of First Data’s issuing clients, which represent approximately 86 million cardholder accounts, have used this service to successfully avoid tens of millions of dollars in credit card fraud. HNC’s Falcon bank card fraud detection technology was developed over a 10-year period and is currently used to protect more than 300 million payment card accounts worldwide.