ControlScan Partnership Helps Acquirers Root out E-Commerce Merchant Fraud

April 10, 2014

ControlScan Partnership Helps Acquirers Root out E-Commerce Merchant Fraud Atlanta-based compliance company ControlScan announced at ETA’s TRANSACT 14 event in Las Vegas this week a partnership with an Israeli counterpart called EverCompliant that will enable acquirers to monitor their e-commerce merchant clients for illegal activities. Much of the fraud prevention effort in the card-not-present space is directed at safeguarding merchants from unscrupulous consumers, but during a break at the ETA event, David Abouchar, senior director of corporate development for ControlScan, told that unscrupulous merchants are a growing—and expensive—problem for acquirers.

Visa and MasterCard have “brand protection” programs in place that require acquirers to identify and report illegal activities being perpetrated by their merchant clients, Abouchar said. The networks can hold the acquirers accountable for fraudulent activities that happen on the acquirer’s “watch.” In some cases, accountability can translate into fines worth hundreds of thousands of dollars.

The EverCompliant solution, which has been running in Israel and other European countries for some time roots out fraud that is very hard to detect (e.g., when a Website offering illegal products runs its transactions through the payment system of a legal Website).

In a case like this, usually all the acquirer can do is run a test transaction through the illegal Website (after they have been alerted to the illegal activity) and see where it ends up.,” said Ron Teicher, founder and CEO of EverCompliant. “This method is not very scalable. We’re offering an approach that combines cyber intelligence with advanced analytics and behavioral analysis on the Website and the transactions that enable us to offer very good risk mitigation around that.”