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Fraud focus: CardinalCommerce obtains a dozen new patents

July 13, 2016 03:48 PM
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Electronic and mobile commerce payment services provider CardinalCommerce has secured a dozen new patents from five countries to help improve its software.

Cardinal aims to improve communication about consumers between online retailers and banks and establish their true identities, thus making it easier for online purchases to get authenticated.

CEO Mike Keresman says Cardinal now holds 63 patents, all proprietary inventions that the company developed. Among retailer clients, he says, there often is a divide between what they know about a consumer and what a financial institution knows. Retailers typically have one set of data about a customer, while banks have their own data. Cardinal’s payments services marry those data sets so that online retailers and banks have more confidence that online transactions are legitimate.

“We’re seeing a giant gap between good orders that ought to be authorized and those orders that aren’t authorized [because] they’re false positives due to a merchant fraud screening,” Keresman says. False positives are transactions that look fraudulent but aren’t. Retailer and bank systems need to be in agreement because “if either side has some suspicion about an account, that online order is either not submitted for authorization or the bank declines the authorization request,” Keresman says.

Cardinal’s payments platforms taps and analyzes 400 points of data at each transaction to increase the percentage and accuracy of authorizations and at the same time reduce fraud. Keresman says the company monitors 750,000 merchant identification numbers, which are what banks and other financial institutions use to identify businesses; plus bank identification numbers, which are the first six numbers of a credit card used to identify the issuing institution. Together these ID numbers help to verify a customer’s identity when they make an online purchase.

“Using that data and information, we improve the efficacy of the entire ecosystem,” he says. “We use machine learning and data analytics to really lift that data authorization rate.”

CardinalCommerce is the payment systems vendor for 12 retailers in the Internet Retailer 2016 Top 500 Guide, including Fanatics Inc. (No. 38), Urban Outfitters Inc. (No. 39) and Vermont Teddy Bear Co. (No. 333).

 

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