To improve merchant and consumer comfort with online spending, MasterCard Worldwide has formed a partnership with Silver Tail Systems Inc. to distribute Silver Tail's fraud-fighting analytics to merchants.

The deal to distribute the Menlo Park, Calif.-based vendor's product is further evidence that card brands want to reap more transactions from online merchants. In this case, MasterCard is offering a product that experts say is fast to implement and relatively easy to use.

"The card brands are all trying to offer more value to merchants to get further into the merchant stream," says Avivah Litan, a vice president and distinguished analyst at the Stamford, Conn.-based market research company Gartner Inc.

The networks are "hoping that by adding more value-added services, they can drive more business and stay on top of things as they move toward mobile" ecommerce, Litan says.

Silver Tail's technology performs risk analysis by examining patterns of behavior at websites and comparing those patterns to normal browsing. In this way, it can locate attempts by hackers and bots to find weaknesses in bank and merchant websites.

"Silver Tail brings a dimension to the risk profile that is not visible to MasterCard right now," says Johan Gerber, MasterCard group head of global network products.

Silver Tail's founders hail from the fraud divisions of eBay Inc. and its PayPal Inc. unit, so combating online fraud is somewhat in the genes of the company, says Philip J. Blank, senior analyst security, risk, and fraud for Javelin Strategy & Research.

But Silver Tail's behavioral-analysis techniques are not unique. It is somewhat similar to the "networked visual mapping" offered by Palantir Technologies Inc. of Palo Alto, he says.

"The traditional analytics engine doesn't have this visual capability and this click-and-point interface, but many [fraud platforms] are moving in this direction," Blank says.

Silver Tail's pattern-recognition technology can tell the difference between a human user and an automated script, Silver Tail chief executive Timothy Eades says. For example, a bot clicks on the components of a website more quickly than humans do, and bots tend to click through in a nonlinear fashion.

"We look at every single click on a website and score this for the user and for the population that uses the website," Eades says.

MasterCard is pursuing a smart strategy by entering a partnership instead of purchasing the company or developing the technology in-house, experts say. That allows it to test the waters by offering new services with very little financial risk.

"Merchants and especially online merchants care about fraud because the acquirers tend to hit them with the liability, so investment in fraud management and anything that can help them is welcome," says Zil Bareisis, a senior analyst for the research firm Celent.

Additionally, the Silver Tail's system is relatively easy to integrate, says Litan. Merchants whose websites are not overly complex could start using the system within a day, she says

MasterCard did not offer details about when the two companies would roll out their combined products and services to merchants.

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