Chase Paymentech LLC this week announced plans to extend its offer of fraud-detection services for card-not-present transactions to all of its merchant customers later this year. The Dallas-based processor will integrate Kount Inc.’s fraud-detection services so merchants of all sizes may use them without requiring a separate contract with Boise, Idaho-based Kount.
“What’s new is the full integration into Chase Paymentech,” Greg Worch, Chase Paymentech group executive, business development, tells PaymentsSource. Previously, similar efforts by the payment processor targeted groups of merchants, but this is the first time all of its merchants will have access to such services, he says.
“This is the most ambitious and most significant we’ve taken in this area,” Worch says, declining to disclose terms of the deal.
The processor will make the integrated Kount services available beginning in the second quarter, starting first with large and midsize merchants. Pricing has not been determined yet, Worch notes. The two companies have worked together since 2008, referring merchants to each other.
The system calculates such factors as the shopper’s location and whether the payment card was used repeatedly to buy items within a certain time span to create a risk score the merchant receives at the same time it receives the authorization code from the issuer, says Steve Rouse, Kount chief operating officer. “The higher the number, the greater the risk,” he tells PaymentsSource.
Merchants will be able to set rules to flag potentially fraudulent transactions or automatically decline them, Rouse says. For example, a transaction for the 12th television purchase in two days made with the one payment card would increase the risk score, he says. Similarly, a merchant could automatically decline a transaction originating in a country in which it does not do business.
Merchants could benefit from reduced charge-backs and fines associated with fraud by detecting and rejecting fraudulent transactions, Kount says.
Chase Paymentech does not disclose how many merchant customers it has, but it claims to process 50% of all Internet transactions.
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