PayGate bolsters security with ReD

Local e-commerce payment platform PayGate has entered into a partnership with global fraud prevention company, Retail Decisions (ReD), an ACI Worldwide company, in a move to give added protection to South African online merchants.

“As e-commerce in South Africa has matured, more and more local merchants are doing business outside our borders,” says PayGate’s head of business development, Brendon Williamson. “This means we need to expand the protection we offer merchants as well. Our fraud screening needs to cover the whole world, not just South Africa.”

Williamson says e-commerce is being driven by consumers because of the ease of purchase and having a far greater choice of items from which they can purchase. Doing business online now gives merchants access to more customers than they could access before, he notes.

According to Williamson, the biggest trend in the e-commerce space right now with fraud is the growth of international cards that are not 3D-Secure being pushed through to SA as part of fraudsters’ activities.

The local banking industry’s gross fraud losses due to South African-issued credit card fraud increased by 23% from R366 million in 2013 to R453.9 million in 2014, largely due to criminals’ misuse of online application channels, according to the latest statistics from the South Africa Banking Risk Information Centre.

On the other hand, Williamson reveals that there has been a 45% increase in fraud last year mainly because of a massive increase in US credit cards that are not enrolled in 3D-Secure technology being fraudulently used in SA; compromises in EMV card security technology; and local e-tailers not yet being that experienced in spotting fraud. “E-commerce is still relatively new in South Africa and fraudsters know this.”

Williamson says PayGate’s expanded fraud protection will be available both to enterprise customers and to smaller merchants that use its PayProtector service.

“ReD’s fraud protection capability is high-powered and complex,” says ReD VP for sales in Africa, Lee-Anne Porter. “It combines a global database of fraud information, rule sets and a neural network that has the ability to learn from experience about fraud patterns and behaviours and apply those learnings to improve fraud detection.”

“This level of protection would normally be beyond the time and cash budgets of smaller businesses, but by integrating ReD Shield into PayProtector, we’re putting all that expertise at our client’s fingertips. Even the smallest online seller can now run global security checks with just one click.”

Enterprise clients will be able to tailor-make their own risk management. “The profile of online fraud is sometimes very specific to particular industries,” says Williamson. “Airlines are most vulnerable to one kind of fraud, retailers to another. ReD offers our clients the ability to define rules and checks that fit their own business, either directly through our portal or in consultation with our risk specialists.”

Porter says the company is delighted to partner with PayGate and help merchants in SA secure the benefits of its fraud protection capabilities. “ReD Shield’s flexibility, coupled with our industry experience and ACI’s decades of payments expertise, global resources and strong local presence positions us well to support the growth ambitions of both PayGate and its customers.