Capital One test-drives a partner integration to reduce false transaction declines

Capital One is partnering with e-commerce fraud prevention platform Forter to reduce false transaction declines with a new automated integration. The $421.6 billion Capital One found false declines were cut in half during a proof-of-concept pilot for the partnership, said Sara Hafner, head of financial partnerships at Forter. [caption id="attachment_217780" align="alignright" width="300"] Photo by Bloomberg Mercury[/caption] Banks decline about 10% of transactions, despite the fact that up to 90% of declined transactions are legitimate, Hafner said. The new tech benefits banks by reducing false declines, and also helps merchants, who would otherwise lose money from declined transactions, she said. Income lost to merchants and issuers as a result of false declines is predicted to be more $443 billion in 2021, according to the Aite Group, an independent research and advisory firm. Forter, which processes transactions for merchants, “knows” more than 850 million unique customer identities globally, according to the company. Its new solution automates the detection of false credit and debit card declines by making that information available to banks to improve its identification of problematic transactions. Capital One is one of two top-five U.S. card issuers using the integration, but Hafner was not able to name the second bank. Artificial intelligence is employed to glean insights from merchants’ transactions and through an API integration makes that information available to banks, which can then include that information in their own authorization decision engines, Hafner said. The API integration is offered either by the bank or Forter; in Capital One’s case, Forter integrated through the bank’s own enhanced data-decisioning API. No private data is disclosed, Hafner said. Capital One declined to be interviewed for this story. “If you think about the authorization or the approval process of an e-commerce transaction, both the merchant and the issuer make a fraud-based decision on it, whether to approve or decline,” Hafner said. “But to date, they've done it in silos with completely different sets of data and insight.” Forter has raised $225 million over five funding rounds, with its last funding round on Nov. 19, 2020, according to Crunchbase. Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com .

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