Wirecard has released a flurry of products in recent months as it builds a global footprint, and its most recent effort focuses on risk management for small businesses that want to sell online.
The German company has just introduced what it calls the Fraud Prevention Suite, which uses machine learning and a database that stretches back years to guarantee credit card payments. The product will debut in Germany as part of Wirecard's e-commerce gateway, with other markets deployed later.
The technology will soon be integrated into Wirecard's Checkout Portal, which supports e-payments and other merchant services.
"The objective is to be a global payment service provider, and all of this is necessary for that," said Susanne Steidl, executive vice president of issuing services at Wirecard. "We are talking to brick and mortar merchants that are expanding into the e-commerce space and for the first time are offering omnichannel solutions."
Fraud is increasing as e-commerce expands, which is pressuring small and midsized merchants where large outlays on security technology are costly. Machine learning, a form of artificial intelligence, is advancing as a way to mitigate fraud and power other data-driven tasks such as marketing and CRM, since the technology is designed to improve as it gathers more data.
"There is a huge potential here, where we can use data analytics to provide a benefit to our merchants," Steidl said.
Machine learning as a tool for marketing and security is becoming standard among merchant acquirers, to the point where it is arguably a must have.
"There are a number of fraud prevention solution providers that offer a similar guarantee program, along with the promise of smarter authorizations thanks to the use of machine learning," said Al Pascual, senior vice president and research director at Javelin Strategy & Research.
But if merchants give up the ability to make decision if a transaction is approved, that can have an impact on customer experience if false positives increase, he adds. "For smaller, less sophisticated merchants this may be less of a concern on one hand, but on the other they are in less of a position than larger merchants to lose business because their fraud prevention provider is overzealous."
The fraud tool is part of a flurry of developments for Wirecard, which is expanding its product menu as it seeks to be a single source of issuing and acquiring services for payments and prepaid products in more geographies. It acquired Citigroup's prepaid card service in North America in 2016, and has launched products such as loyalty rewards for blood donors.
"The Citi acquisition gives us boots on the ground and a management team that bring products on both the issuing and acquiring side in the States," said Deirdre Ives, head of North America for Wirecard.
Wirecard has also collaborated with Alipay to connect merchants to travelers from China.
"Anything that has to do with the Chinese payment market is very interesting," Steidl said. "There's a huge uptick there."