3D Secure Bolsters Data Alliance for Authentication and Fraud Prevention:
In the rapidly evolving world of e-commerce, the fight against fraud is becoming increasingly sophisticated. Key tools in this battle are big data and AI-enabled analytics, which are essential for processing transaction data and detecting fraud.
The e-commerce checkout and payment process generates a vast amount of data, much of which holds the potential for fraud detection for the merchant. This data, often referred to as a transaction data straw, can be transformed into "fraud detection gold" when processed effectively.
One of the significant developments in this area is the emergence of e-Commerce Authorization Data Consortiums. These consortiums, consisting of e-commerce players such as merchants and payment processors, are pooling transaction, payment method, and authentication attestation data. This collaborative data sharing improves fraud pattern recognition and enables more accurate, real-time decision-making at authorization.
The global card networks are also getting involved, implementing 3-D Secure to transmit additional data from merchants to card issuers. This protocol adds an authentication layer to card-not-present transactions, thereby reducing fraud liability and enhancing risk assessment accuracy.
Specialization by country/market and opportunities for micro-specialization among vendors are promising in the field of consortium data. The most promising area for consortium data among fraud platforms is multi-site device information, behavior, and purchasing history. Information being transmitted includes device ID, biometrics, email, frequency, location, screen colors, IP address, and more.
The power of consortium-level transaction data is being utilized for fraud detection. As authentication companies build out their consortium data, competition is expected between vertically oriented consortiums and broad horizontal consortiums.
AI and machine learning integration are also playing a crucial role in these consortiums. AI-powered models analyze complex fraud patterns from consortium data, including authentication attestation and payment method details. These systems continuously learn from consortium-shared data, substantially improving fraud detection accuracy and reducing false positives by about 80%.
Regulatory pressures, especially in regions like ASEAN, are accelerating the move away from SMS OTPs towards phishing-resistant technologies such as passkeys and biometrics, which strengthen 3DS authentication and reduce fraud vulnerability.
In summary, e-Commerce Authorization Data Consortiums are leveraging 3-D Secure’s evolving capabilities along with AI and biometric authentication to create smarter, collaborative fraud detection ecosystems. These developments improve risk accuracy, reduce false positives, comply with emerging regulations, and enhance customer trust while mitigating increasingly sophisticated fraud threats.
Finance and technology are strongly intertwined in the formation of e-Commerce Authorization Data Consortiums. The collaborative data sharing among e-commerce players, global card networks, and fraud platforms, powered by AI and machine learning models, provides greater accuracy in fraud detection and risk assessment, ultimately reducing financial losses due to fraud.
The utilization of phishing-resistant technologies, such as passkeys and biometrics, as a result of regulatory pressures in regions like ASEAN, showcases how technological advancements are playing a crucial role in addressing the evolving fraud landscape within the domain of finance.
