How fraudsters forced Ticketmaster to become a digital ID innovator

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Ticketmaster has battled fraud in paper ticketing for years — but mobile technology introduced new ways for fraudsters to steal, resell and counterfeit high-priced digital tickets.

That shift eventually forced Ticketmaster to re-engineer how consumers buy tickets, devising a digital ID-based system that aims to bring fraud rates close to zero.

The move is part of a broader development by payments and related industries for robust digital ID, primarily to address security gaps. Ticketmaster’s solution also opens new one-to-one marketing channels not previously available to the entertainment company.

“We’re a technology company that sells tickets now, as opposed to a ticketing company with a bunch of technology,” said Justin Burleigh, Ticketmaster’s chief product officer.

The overhaul began about two years ago, when Ticketmaster started developing Presence, a venue-connected platform that launched last year. This forms the data backbone of the new digital ID system, he said.

The API-based Presence platform will be installed in more than 350 U.S. venues this year, and this month Ticketmaster announced SafeTix, a contactless-enabled digital ticket linked to each event attendee’s mobile device, featuring a token that changes every 15 seconds for security.

SafeTix is rolling out first at NFL stadiums and some concert venues, with the goal of expanding to all events Ticketmaster serves in the next couple of years, Burleigh said.

Ticket holders may store each purchased SafeTix ticket within their smartphone as an NFC pass in Google Pay or the Apple Wallet or utilize a rotating barcode within the Ticketmaster app. Either way, the technology makes it difficult for fraudsters to intercept or copy it, and no one else can use a ticket that's already tied to a ticketholder’s device and Ticketmaster account.

Apart from the improved fraud mechanisms, SafeTix introduces new, personalized features available first through Apple Pay, introducing a range of new services that will likely be available to all users in the future, he said.

“Through Apple Pay, because of the way that wallet is designed, SafeTix can send notifications that welcome you to the event, guide you to your seat, [and] show you where the shortest lines are at the venue, along the lines of a concierge,” Burleigh said. Ticketmaster can also push personalized offers for food, beverages and merchandise to ticket holders through SafeTix.

That upgrade comes with a bit of a cost to consumers. SafeTix eliminates the ability to take screenshots of digital tickets — a practice useful for legitimate ticket holders to store and exchange tickets, but one that fraudsters often exploit, he said.

No more anonymity
With SafeTix, every time a specific digital ticket changes hands, the new recipient must provide a mobile phone number or email. Ticket buyers also must establish an account with Ticketmaster. Burleigh said the benefits of obtaining this customer data far outweigh any new friction to selling or reselling tickets.

“We’ve de-anonymized the ticket-selling process, so now there’s a secure mobile ticket and I can show you the full chain of custody end to end, from who originally purchased it to who it was transferred to, again and again,” Burleigh said.

That data is valuable not just to Ticketmaster but to venue operators, he said.

“With paper tickets, because of the way people exchange tickets, we had no idea who was attending events and we couldn't engage with them. Now we know who purchased the ticket and who actually attended the event, giving us a whole range of ways of engaging with them,” Burleigh said.

Ticketmaster is also experimenting with facial recognition, and recently took a stake in facial recognition technology provider Blink Identity, he said.

“We’re thinking about how we can use facial recognition to enhance the experience if you’re a suite-holder, a VIP or someone with a backstage pass, to really take out friction from ticketing, and create some unique fan experiences,” he said.

Facial recognition could eliminate the need for an attendee to show any physical token or ticket to access events, streamlining ingress to events, and it could make more customized options available based on the user’s preferences, Burleigh suggested.

Ticketmaster must tread carefully in how it handles its growing body of consumer data. The company, a subsidiary of Los Angeles-based Live Nation, last year suffered a spate of negative headlines after a data breach caused by third-party malicious code in the U.K. compromised account details of 40,000 of its customers outside North America, triggering many fraudulent transactions.

Some consumers are growing wary of facial recognition in certain contexts, and San Francisco’s Board of Supervisors recently banned the use of facial recognition by police and city agencies, responding to concerns from consumers and civil liberty advocacy groups.

“Typically when you think of biometrics and facial recognition, that would imply you’re storing millions of fans’ faces in a database, but we don’t," Burleigh said. "We think about facial recognition in the way it’s used on an iPhone, where we create an algorithm that’s a string of numbers that has a 98% probability of matching that data with the corresponding facial image of a customer for security.”

Ultimately Ticketmaster’s goal with its evolving digital ID program is to combine fraud control with a new experience for those attending events.

“We look at identity as a healthy element to selling tickets, helping us know who is buying tickets and who is attending the shows, making that transaction more meaningful to us,” Burleigh said.

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Fraud prevention Card fraud Fraud detection Payment fraud Digital ID Identity verification