Crystal Clear Payments is fighting fraud by rapidly changing permissions in response to evolving risk.

"We update our models as transactions come in, which is important because it allows us to see a pattern of spending quickly, rather than accumulating data and then updating our model six months later," says Shawn Sinner, president and chief sales officer of CCP, which provides payments processing to mostly community banks and credit unions. 

To bolster security, CCP has deployed SmartGuard, a BPC Banking Technologies product that monitors transactions at the point of sale, ATM, online and mobile channels.

SmartGuard's models enable the user to add rules "on the fly" as weaknesses and vulnerabilities are detected among a financial institution's customers. The technology is managed through the cloud, enabling strong anti-fraud tools to be delivered to smaller card issuers, Sinner says.

SmartGuard is rules-based and neural based, so "our system learns over time and knows the spending behavior of a cardholder," Sinner says. "If it doesn't match the spending behavior, the transaction will be flagged as a suspected transaction and an investigation alert will be queued. Our [technology] is rules-based also, meaning when a defined rule is triggered the transaction will be flagged."

A consumer's payment data is also fed back into SmartGuard's risk scoring engine, and a graphical user interface displays emerging fraud trends that can inform changes to the rules. 

"You could have a rule that any transaction outside of the state of Florida, and/or for more than $100 at one particular time, or on a certain type of item, can be flagged for more investigation or extra vetting of the user," Sinner says.

CCP has also included a function on its mobile app that allows a PIN to be used to activate and deactivate cards. "You can keep the card off when you're not using it," Sinner says.

"When the card is off, we set the card status to 'inactive,' and when the card is on we set the status to 'active,'" he says. "It's a pretty simple concept but is our 'secret ingredient,' and the open technology of SmartVista [a payments  technology company ] allows us to provide this feature without any software modifications."

While card activation technology is already offered by a lot of companies, there is demand for more advanced rules-based fraud prevention systems, says Brian Riley, a CEB TowerGroup research director. 

"Rules based systems which add layers of fraud protection with predictive tools that react to cardholder behavior are the strongest tools available to control fraud," Riley says.

Payments fraud is becoming more varied as the amount of data used to manage consumer relationships expands.  Many companies are adopting new technology to address the threat, including TNS, TSYS and Heartland Payment Systems.

"Consumers, insulated from fraud losses by industry policies and regulatory mandates, traditionally take a passive role in protecting their payments cards; investments in end-to-end encryption, biometrics and dynamic account numbers stand out as areas for adding value, particularly as the industry migrates toward EMV and smart-card adoption," Riley says. 

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