Finance and Technology Companies Take a Stand Against Fraud
As long as there has been e-commerce, there has been cybercrime. In an industry at the forefront of technological development, criminals are an all-too-common reality, hindering technological progress and creating large costs for businesses. The industry has now reached a turning point. Progress has always been the priority, and the time has come, for the sake of progress, to deal a fatal blow to fraudsters.
Last month, both Visa and MasterCard announced data-sharing partnerships with anti-fraud technology companies. Visa Inc. has partnered with Ethoca, a Toronto-based fraud identification firm, while MasterCard has partnered with Kount, an Idaho-based fraud management company. The partnerships, which will allow both companies to locate and shut down fraudsters more efficiently, is part of a larger movement aimed at putting up an industry-wide united front against cybercrime.
“For the first time, we are seeing a concerted effort to identify the persons responsible for cybercrime and punish them to the full extent of the law,” said Ferhan Patel, Payza’s Chief Compliance Officer and Director of Global Risk and Compliance. “Organizations around the world are working together to shut these fraud rings down once and for all.”
The arms race between e-commerce technologies and cybercriminals came to a head with several highly publicized security breaches such as the LinkedIn password leak. More recently, several major victories have been made by law enforcement officials working in concert with e-commerce businesses such as Payza, including the identification and arrest of several suspects behind a $200 million credit card fraud ring, and the FBI’s takedown of over a thousand botnets behind the Citadel Trojan.
The Tipping Point
In the past, the e-commerce industry accepted the losses caused by cybercrime as part of the price of doing business. When a customer falls victim to a fraudster it’s generally the business that takes the financial hit of the fraudulent transaction. Businesses never let that stop them from marching forward in the name of progress and technological development.
“We’ve always been fighting cybercrime and stopping fraudulent transactions in their tracks, but until recently we could never get to the person responsible. Transactions could be traced to a server or a computer, but then we’d hit a dead end,” said Patel. “Now, with the help of law enforcement officials, we are often able to actually pinpoint the people behind the fraud rings and hold them responsible for their crimes.”
The culture has changed. The industry no longer views cybercrime as an unavoidable annoyance. With the technology and experience of a maturing industry, businesses are now capable of stopping fraudulent transactions in their tracks, the transactions can now be stopped even before they are completed. By working together and sharing information, the e-commerce industry is now finally able to stop crime at its source.