Acquirers Turn Fraud Data Into a New Revenue Stream

Payment acquirers are turning data collected during payment processing into commercial products for merchants, banks and other payment companies. These products include risk signals, analytics and fraud-prevention tools.

The data comes from transaction activity, chargebacks, account behaviour and fraud investigations across acquiring networks. Acquirers analyse the information to identify suspicious payments, compromised cards, repeated fraud attempts and new attack methods.

Services offered by acquirers may include fraud scoring, transaction monitoring, identity checks, chargeback management and payment-risk reports. Customers use these services to screen transactions before approval, reduce losses and measure fraud exposure across sales channels.

The services provide revenue beyond payment-processing fees. Acquirers may charge for fraud-prevention software, data feeds, consulting and managed risk services. Pricing can be based on transaction volume, the number of users or the level of protection.

Acquirers process payments for many merchants across different businesses and markets. This gives them access to transaction patterns that may reveal links between payments that are not visible to an individual merchant.

The data is subject to privacy, data-protection and competition rules. Acquirers also need controls to limit incorrect declines of legitimate transactions, which can reduce sales and affect the customer experience.

Fraud intelligence has traditionally been used to protect acquirers and their customers from financial losses. It is now also being sold as a service across the payments industry, including to merchants that process payments through another provider.