LONDON 12th December 2011, Chip & PIN, 3D Secure and PCI standards have so far received the ‘lions share’ of the media limelight, according to leading payments and fraud prevention software supplier, Alaric International. As a result of this, Retailers and Financial Institutions are increasingly misinterpreting these first and second prongs of fraud prevention as sufficient protection against fraudsters.

Alaric is keen to acknowledge that Chip and PIN, 3D Secure and PCI standards are extremely efficient at what they are designed to do, and undoubtedly halt a vast amount of fraudulent activity. However, they provide only the elementary tools needed to detect attempted fraud. It is the fraud that is now bypassing these methods which must be prioritized and more effectively dealt with.

The reason for implementing a more tailored third prong is simple; as the other security measures are becoming more sophisticated, the breakthrough breaches which are successfully attacking merchants are becoming increasingly difficult to detect and prevent. Alaric now believes that the advanced software systems provided by expert vendors in the payments space must be understood and valued to the same level as PCI Standards and EMV Chip & PIN/ 3DSecure.   

Mike Alford, CEO at Alaric, says “Of utmost importance to Alaric, is the education of merchants regarding the risks to which they are susceptible and promoting the necessity of flexible in-house fraud prevention solutions. It is no longer enough just to secure payments transactions and central databases and to leave it at that. Merchants and acquirers should now turn their attention to installing intelligent software products that will automatically recognise patterns of fraudulent behavior and stop them in their tracks before more damage is done.”

Many acquirers and merchants already have a fraud detection system in place, but in order to keep up with constantly emerging new fraud threats, companies should upgrade to an agile self-learning model.

Mike Alford continues, “Our solution, Fractals 3.7, takes a truly innovative approach when fighting fraud attacks by applying Artificial Intelligence ‘self-learning’ within its fraud prevention software.  A key benefit of self-learning is that it provides real time, inflight blocking of individual transactions which when compared to typical batch solutions, can save an institution as much as 90% of its fraud losses. It is simply not possible to achieve this level of protection without a bespoke solution. Any merchant without the most powerful real-time fraud prevention solution is now, more than ever, leaving themselves susceptible to serious fraud attacks.”