Dive Brief:

  • Capital One said it’s teaming with the fintechs Stripe and Adyen to create a data share program that will speed up the authorization process so secure transactions can happen faster, an email from a Capital One spokesperson said.
  • The program is an open-source collaboration that lets merchants send real-time transaction data that is shared among Capital One, Stripe, and Adyen to help those firms spot fraudsters across their networks, the release said. The Direct Data Share program will be provided to merchants for free.
  • Stripe and Adyen said the Direct Data Share will both reduce fraud, and reduce instances of transactions that are improperly flagged as fraud, saving its customers money and frustration.

Dive Insight:

McLean, Virginia-based Capital One is partnering with San Francisco-based Stripe and Amsterdam-based Adyen to combat fraud, a scourge of their industry that is only expected to grow worse in the coming years.

In this case, the three companies will be swapping information on potential fraudsters.

Capital One and Stripe have shared this service since last year, but the bank announced the inclusion of Adyen on Wednesday.

Fraud is hardly a new problem for the payments industry and signs point to the problem growing bigger in recent years. U.S. consumers lost roughly $10 billion to fraud in 2023, according to the Federal Trade Commission, a 15.7% increase over 2022.

Banking, payments and transfer fraud were the top payment methods for such fraud last year, accounting for $1.8 billion of that figure.

Globally, payments fraud is expected to cost merchants $343 billion between 2023 and 2027, according to Juniper Research.

Capital One’s Head of Fraud Strategy Jon Borman said Direct Data Share will let the three companies share information across platforms.

The enhanced data is used to better identify potentially fraudulent transactions which allows Capital One to prevent additional fraud while approving additional legitimate transactions,” he said in an email.

Sharing information also reduces the chances of a transaction being flagged as fraudulent when it is actually legitimate, Borman said.

Direct Data Share has allowed $1 billion in transactions that would have been declined, an email from a spokesperson for TK said


Leave a Reply

Your email address will not be published. Required fields are marked *