VeriSign will launch a service to thwart online fraud with support from at least one major credit card company...
VeriSign Fraud Protection Services, a subscription-based service that helps merchants spot fraudulent online transactions has a fraud detection engine which uses information derived from more than $20bn (£12bn) in online transactions managed by VeriSign to model different kinds of online fraud behaviour, according to Trevor Healy, vice-president of payment services at VeriSign.
The service will concentrate on spotting three common types of online fraud activity: product theft, identity fraud and cash fraud.
Product theft is the use of stolen credit card information to make unauthorised product purchases. Identity fraud is the theft of individuals' personal information, including financial information, from online transaction systems and cash fraud refers to the use of online transaction systems to issue unauthorised refunds to a credit card.
For merchants that sign up for the service, VeriSign monitors online transactions for suspicious buying behaviour, unusual transaction volume or transactions linked to IP addresses, e-mail addresses or credit card numbers associated with fraud.
Details of transactions are also vetted. For example, for customers seeking a refund to their card for a purchase, VeriSign confirms whether the original purchase transaction actually occurred.
Transactions that are deemed to be fraudulent are halted mid-stream, before money has changed hands or product has been shipped.
The merchant is then notified by VeriSign of the possible fraud activity by phone or e-mail. If the merchant can verify the transaction with the customer, the transaction is allowed to go through, Healy said.
"Criminals don't discriminate as to who to commit crimes against, so we try to cater to the complete spectrum [of merchants]," he said.
Small operations can expect to pay around $19.95 (£12) per month to use the service as well as a 5 cents fee per transaction.
Pricing and monitoring services for larger operations also includes a per transaction fee, but varies to suit the type of business and volume of transactions handled by the merchant, Healy said.
While the data rules used to spot fraud are similar for large and small customers, larger suppliers receive customised monitoring just for their traffic and VeriSign personnel dedicated to monitoring traffic on their site, he said.
While the service is geared towards merchants, it works alongside other online transaction authentication programs like MasterCard's SecureCode and Visa's Verified by Visa programme, according to Healy.
Credit card companies have been supportive of the initiative, he said. VeriSign's announcement included a statement of support from an executive at MasterCard.
Initiatives like the VeriSign service and other buyer authentication programs all get at the generic industry problem of fraud, which is widely accepted as a good thing.
VeriSign's Fraud Protection Services is already in use by a number of online merchants and is available to the public.
Paul Roberts writes for IDG News Service