Acquirers Turn Fraud Data Into New Merchant Services

Payment acquirers are packaging information from payment transactions and fraud-monitoring systems into services sold to merchants. The products give acquirers a source of revenue beyond payment processing.

The services can help merchants identify suspicious transaction patterns, assess risks linked to payment methods and customer accounts, and adjust fraud controls. Acquirers may provide the information through dashboards, alerts, risk scores and tools connected to a merchant’s payment operations.

Data collected across merchant networks can help acquirers identify recurring fraud patterns. Relevant findings may then be shared with individual businesses, subject to data-protection and financial regulations. The information may include chargebacks, account takeovers, payment testing, stolen-card use and unusual purchasing behavior.

For merchants, these services may reduce the need to build separate fraud-monitoring systems. They can support decisions about whether to approve, reject or review a transaction.

Acquirers have traditionally handled payment authorization, settlement and disputes. Their role in fraud prevention has expanded with the growth of online commerce and fraud schemes that span merchants, payment channels and regions.

The sale of fraud intelligence raises questions about data ownership, customer privacy and the use of information gathered from multiple businesses. Acquirers must determine which data can be combined, how it should be anonymized and which findings can be shared without exposing confidential customer or commercial information.

The products are part of a broader shift in payments toward services based on transaction data. Acquirers are using existing fraud-monitoring capabilities to develop products for merchants alongside their payment-processing services.