The Tel Aviv-based fraud prevention provider Forter insists that the legacy security model for e-commerce won't scale enough to combat the sharp rise in fraud coming in the post-EMV economy.

The U.S. EMV liability shift takes effect Oct. 1, and the transition to EMV security at the point of sale has historically triggered more fraud attempts in card-not-present environments.

Forter delivers a fraud analytics system that approves or denies e-commerce transactions in real-time, eliminating the need for manual review of transactions that are determined to need a closer look. Those "maybe" transactions create delays and cost money, said Bill Zielke, chief marketing officer for Forter, which has a marketing and sales office in San Francisco.

"Our overall technology approach is advising retailers to automate and make scalable their infrastructure," Zielke said.

Retailers are fighting fraud using rules-based systems that require them to become fraud experts, Zielke said. Instead, Forter's system analyzes customer activity and incorporates "thousands of independent data sources" to automatically build a consumer identity that can be used for fraud decisions, Zielke added.

Forter also guarantees to handle chargeback costs on any fraudulent transaction it previously approved.

This message will resonate with merchants who are "rightfully spooked with EMV terminalization and what that means for card-not-present fraud," said Al Pascual, senior analyst for Javelin Strategy & Research.

E-commerce merchants are seeking ways to bolster security and, more importantly, manage their costs, Pascual said.

While the guaranteed service sounds good, it is not a new concept in payment security, Pascual added. "It has existed in check processing for decades, but it is a very attractive thing for merchants because they understand it."

Many other vendors will make the same pitch in a competitive security market, Pascual said.

In addition to providing real-time fraud prevention services, Forter studies global e-commerce fraud trends, warning merchant clients about countries that have had dramatic increases in fraud.

In doing so, Forter has also documented "hot spots" for companies to be aware of when they enter new markets. Most recently, it flagged China as one it could help guide merchants into safely as the country has loosened restrictions on international commerce, potentially leading to a corresponding hike in fraud attempts.

Former CyberSource CEO Michael Walsh has joined Forter's five-person board of directors, sending a message to the industry about "the old becoming the new" in security, Zielke said.

"When you have a guy like Michael Walsh realizing the technology shift, and choosing to be part of our future, it is an innovative step for us," Zielke said. "Michael brings a lot of institutional knowledge about the technology and how to bring it to market."

Walsh managed CyberSource operations and expansion into Europe, Asia and Latin America and, after Visa acquired CyberSource, oversaw the merchant-facing business operations in the Americas prior to becoming CEO. Walsh was not available for an interview.

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