Let’s Talk Payments is excited to publish the first ever leaderboard analysis of one of the most crucial elements of the payments industry - Fraud and Authentication. Considering the high degree of competition and the continuous innovation in this space, we have developed two separate LTP9 leaderboards for this category:
- LTP9 for Fraud and Authentication in Online Payments (CNP) and
- LTP9 for Fraud and Authentication in Proximity (In-store) Payments.
Each of these leaderboards represents the most promising 9 companies in the category.
Extensive research, including detailed company profiling and regular interactions with industry stakeholders, has helped us in developing key insights which are backed by data. The identification of these leaderboards has followed a rigorous methodology of building a comprehensive list of all companies in the space and analyzing them on a scorecard with 15+ subjective and objective parameters to arrive at quantified assessment for each one of them. These parameters are further clubbed under 3 main heads: Impact, Momentum & Focus. Continuous brainstorming and exhaustive research have been instrumental in developing these scorecards to help capture all aspects of this category – both at an industry and a company level. Our own coverage of the space over the past year+, coupled with first-hand industry experience, has been a valuable source of inputs in determining the LTP9 selection. [Read more about the selection framework here]
Not limiting ourselves to publicly available information, but rather taking the further step of listening directly to industry leaders is what drives the authenticity of the LTP9 framework. One very important aspect of LTP9 companies is their core competency in the category under consideration. This will help our readers to obtain a clear understanding of the product positioning of each company amidst a plethora of exciting companies in this space.
We have also developed LTP Canvas Reports to augment this effort. The LTP Canvas Report includes the raw data, insights and understanding for the companies in the specific segment. It also talks about the process through which the companies have been given their respective ratings, as per the framework, to arrive at LTP9. These reports will be available to our newsletter subscribers for pre-order beginning later this week and to everyone else next week.
Here are the first two LTP9 leaderboards for the Fraud and authentication segment in the Payments Industry:
- LTP9 Online Fraud & Authentication
- LTP9 Proximity Fraud & Authentication (In-store Payments)
Notes: LTP9 is currently focused on the US market. While many Fraud, Authentication and Security companies offer solutions in multiple sectors, we looked for those that focus on Payments, Commerce and Banking.
1. LTP9 Online Fraud & Authentication
The Online category focusses on companies providing fraud and authentication solutions on any device for payments done remotely or in a CNP environment. The core competencies and solution offerings of these companies lie primarily in providing payment fraud & security platforms for customers operating in the Card-not-present space.
A brief profile of the shortlisted ‘LTP9 Fraud & Authentication – Online category’ companies:
Arcot Systems(CA) : Founded in 1997, Arcot Systems holds a strong place in authentication and digital signing solutions for protecting and verifying digital identity. The company was acquired in 2010 by CA technologies, which itself delivers fraud and security solutions and has strengthened its position in cloud based security through this acquisition. The combined entity offers multiple product solutions - SaaS based authentication, real time multi-factor authentication utilizing contextual factors such as Device ID, geolocation, IP address and user activity information, and payment security products for CNP, 3-D secure, EMV etc.
Authentify: With over a decade and a half of operations, Authentify continues to expand its footprint in telephone-based, real time, multi factor, out-of-band authentication services. It provides cost-effective operations to its customers offering the flexibility to choose from 2-factor or 3-factor authentication layers for user logins.
CyberSource (Visa): Headquarterd in California, Cybersource was acquired by Visa in 2010, and operates as a wholly-owned subsidiary of the largest payment network. This company with focused operations in payment processing, payment security and fraud management had also acquired Authorize.net in 2007 thereby strengthening its core product offerings. Cybersource with all its associations is a leading fraud and security players in the online space with 400,000 businesses worldwide using its solution.
EWS/Payfone : Backed by leading venture firms and strategic investors such as American Express, Verizon Wireless, Rogers Communications, Relay ventures and more, Payfone (founded in 2008) has attracted equity investment and a commercial agreement from Early Warning (EWS), itself a trusted leader in fraud prevention and risk management. With Payfone being a leader in secure mobile authentication, Payfone and EWS together hold a strong position in the payment fraud and authentication segment. The Payfone Signature is a deterministic trusted mobile identity that is solid and secure. Through relationships with the Tier 1 Mobile Network Operators (MNOs), the Payfone Signature leverages data directly from the MNOs to permanently bind, verify, and subscribe to mobile identity at the account level.
FeedZai: Founded in 2008, this company makes it to LTP9 as a relatively new market entrant offering advanced analytics based fraud technology. Using big data science and machine learning, its solutions help combat fraud and payment associated risks for each transaction. With positive industry reviews, growing clientele, FeedZai's fraud prevention software protects over $85B in electronic payments per year for Global 2000 customers.
FICO: An established player with an increasing market footprint, FICO uses Big Data Analytics, Business Intelligence and Predictive Analytics to provide end-to-end fraud, security and compliance management solutions. It uses information on recent fraud patterns, transaction & device behavior and executes real-time transaction event monitoring with its ‘FICO® Falcon® Platform’. FICO has great market traction using its solutions such as Securebuy to deliver advancements in fraud & authentication.
ReD (ACI): ReD is a leading ecommerce and payments fraud prevention company. It was acquired in July 2014 by ACI Worldwide, a leading global provider of electronic payment and banking solutions. ReD’s solutions have strengthened ACI’s position with global SaaS-based ecommerce solutions with integrated fraud detection/management. ReD has a strong global position in this space with real-time or near-real-time fraud screening solutions based on fraud patterns and behaviors gathered continuously from around the world.
Safenet (Gemalto): Safenet, a company founded in 2006, was already in a strong position to provide fraud and authentication services and with its acquisition by Gemalto, its position has been further solidified. Combination of an extensive portfolio of data protection solutions including HSM1 advanced cryptographic key management systems by Safenet and DDA on EMV technology offered by Gemalto makes it a strong player. With end to end data encryption and tokenization, Safenet’s solution offers Multi-Factor Authentication products providing Authentication as a Service (AaaS) and much more.
Vasco Data Security: With an industry presence of more than two decades, Vasco Data Security is an established player in the market providing two-factor authentication and electronic signature solutions to financial institutions. It also provides Strong two factor authentication for mobile payments. VASCO enables more than 10,000 customers in 100 countries to secure access, manage identities, verify transactions, and protect assets.
2. LTP9 Proximity Fraud & Authentication (In store Payments)
In the Proximity category, our focus is on companies providing fraud and authentication solutions on any device for in-store payments, completed at physical locations. The solution offerings and strengths of the chosen companies is in providing payment security solutions at in-person points of interaction such as POS.
A brief profile of the shortlisted ‘LTP9 Fraud & Authentication – Online category’ companies:
Apple Pay: This is one of the most secure, seamless and safe payment mechanisms currently in the proximity space. Apple Pay offers unparalleled security in the mobile wallet segment backed by three major technologies to authenticate and process transactions - Biometric authentication using Touch ID, NFC in the new iPhones and the Tokenization platform that has been implemented along with payment industry partners. With support from partners such as the card networks, processors and issuer banks, Apple Pay is setting a new standard in proximity payments security.
Bluefin Payment Systems: Started in 2007, Bluefin Payment Systems specializes in providing secure payment gateway solutions to over 15,000 U.S. and Canadian merchants. Their proprietary PayConexTM platform includes PayConex P2PE – the first PCI-validated Solution for point-to-point encryption (P2PE) in North America. With PCI Compliance, End to End Security and Tokenization technology, it provides highest level of security to 28 million North American businesses.
CardConnect (Ingenico): CardConnect has a clear focus in the payments space and provides leading solutions in Point-to-Point Encryption (P2PE), Patented Tokenization, and CardConnect Vault (encrypted card numbers are stored in 100% PCI compliant environment). Their strategic partnership with Ingenico helps in leveraging the entire value chain of Ingenico’s payment offerings, from EMV to NFC-ready payment devices as well as their On-Guard data encryption solution.
Elavon: As one of the leading companies in the merchant acquiring market, Elavon offers a solution in this space called SAFE-T Suite that stands for Secure and Flexible Encryption & Tokenization. Elavon encrypts card account numbers and mag-stripe data from the first point of entry at the POS to the gateway (P2PE) or to and from the processor/acquirer (E2EE). It also offers a tokenization solution as part of its SAFE-T suite.
First Data: This leading payment processor offers both tokenization and encryption technology backed with its rules-driven fraud detection engine to combat fraud. Its Secure Transaction Management Solution, TransArmor, removes the need to store card data by deploying tokenization. It has its own datacenters and uses industry leading architecture and solutions at every step in the transaction handling to manage fraud and security. For authentication and identification solutions, First Data supports new chip-based developments such as Dynamic Data Authentication and Combined DDA and Application Cryptogram Generation to provide additional security and improve the ability to detect counterfeit and duplicate cards.
Validity Inc. (Synaptics): Validity Inc. provides fingerprint sensor solutions for authentication, mobile payment and touch-based navigation systems. It was acquired by Synaptics in November 2013. With that, Synaptics expanded into the fingerprint identification market. Founded in 2000, Validity’s fingerprint sensor solutions offer high levels of performance & security and focus on mobile payment transactions & cloud-based services. Their solutions in this sector and work done with Windows and Android phone makers is expected to create a meaningful impact on the market as biometrics goes mainstream in payments led by Apple’s Touch ID success in payments.
Validsoft: Validsoft is a leading global player (started in 2003) and is finding increased traction in the payments fraud and security space in the US through its fraud and security solutions. Notable amongst its solutions is VALid-POS® which is a real-time, out-of-band, card-present fraud detection and prevention solution. Designed to combat ATM & point-of-sale card fraud, it determines, in real-time, that a physical transaction involving a payment card is in proximity to a mobile phone linked to the payment cardholder. This patent pending Proximity Correlation Logic has attracted leading industry players like FICO to partner with them to develop new proximity correlation services for credit and debit card issuers which is aimed at improving the safety of payment card transactions at an ATM or a point-of-sale terminal where the card is being used.
Vantiv: Vantiv provides fraud and security Solutions to both merchants and financial institutions. With Vantiv Secure, merchants get a more convenient and easy to use package that helps protect their businesses including the following: PCI Assist, Point-to-Point Encryption (P2PE), Tokenization and Breach Assist. Vantiv’s partnership with Trustwave for Vantiv Secure and other such partnerships and acquisitions (e.g. Element Payment Services) further enhance its position.
Verifone: With an extensive range of fraud and security solutions such as Verishield Total Protect, Verifone achieves a technology edge by providing end to end encryption using tokenization, encryption, biometrics, and EMV/NFC across a range of its POS hardware solutions such as payment terminals, mobile POS, multimedia POS, etc. Strategic partnership with RSA and a series of acquisitions (such as payment security provider Hypercom and others such as Point, Global Pay, etc.) have strengthened its position in the proximity fraud and authentication space. A significant customer base, increasing focus on encryption/other POS services, focus on the payments industry along with a large part of its installed POS systems ready for NFC/EMV worked in Verifone’s favor in our analysis.