Verifi Inc., which provides risk-management services for card-not-present merchants, has formed a partnership with Demandware Inc. to provide online merchants with fraud-prevention and risk-management services, Verifi announced Jan. 12.
Through the partnership, online merchants using Burlington, Mass.-based Demandware’s e-commerce platform may integrate it with Verifi’s fraud-prevention service, Cory Capoccia, Verifi vice president of strategic partnerships, tells PaymentsSource. When merchants log in to the Demandware website they can learn about Verifi’s service and click a button to install it, Capoccia explains.
Verifi becomes the aggregator for online merchants and manages all third-party services merchants may use to detect fraudulent customers and transactions,” Capoccia says. These services include evaluating each transaction and the payer’s Internet protocol address to look for fraudulent information, he adds.
For example, for an online jeweler who often deals with high-value transactions, Verifi can determine whether the IP address is in the same country as the billing address, Capoccia says.
Verifi also can detect fraudsters based on “device intelligence,” which uses information from the type of operating system or Web browser a consumer is using, Capoccia notes.
Once merchants have the information from Verifi, they can choose to accept, re-review or decline the transaction, he says.
The multiple fraud-prevention layers Verifi offers enable online merchants to separate good transactions from the bad and reduce the amount of false positives, Capoccia says. Merchants also may save money by not shipping products to fraudsters or dealing with potential charge-backs stemming from fraudulent transactions, Capoccia says.
“Merchants using Verifi through the Demandware platform also will have access to any system upgrades Verifi offers, Capoccia says.
Pricing is based on transaction volume and the type of services needed, which differ for each merchant, Capoccia says.
The type of services that Verifi offers “definitely has value for merchants, especially smaller merchants,” Julie Conroy McNelley, an analyst with Boston-based Aite Group LLC, tells PaymentsSource.
Larger merchants may want to manage their own fraud systems because they want the control, she says.
But for smaller merchants, this service is a time-saver and enables them to manage their fraud-detection systems in one place, McNelley says. “Verifi basically acts as an outsourced information-technology resource as well as a fraud expert,” she adds.
Moreover, using a layered fraud approach is key, McNelley contends. Online merchants “can’t just have one guard dog at one door. They need each door guarded by several security options,” she says.
Sophisticated fraudsters often can work around systems such as IP address detection, so adding more levels of security will ensure they are stopped at another level, McNelley says.
Verifi in March also partnered with ThreatMetrix Inc. to enable merchants selling virtual currency, concert tickets and jewelry to gain access to ThreatMetrix’s fraud-detection program and its global database of fraudulent customers (
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