FinTech giant Stripe has launched Enhanced Issuer Network, a set of partnerships with major US card issuers, with the aim of reducing fraud.
Stripe offers secure access to transaction fraud scores from its fraud prevention solution Stripe Radar through an encrypted pathway with issuers including Capital One and Discover. The Enhanced Issuer Network helps issuers decrease fraud, reduces checkout frustration for consumers, and increases payment authorization rates for businesses.
Each year, Stripe claims to process hundreds of billions of dollars for millions of businesses around the world. Through machine learning techniques trained on transaction data, Radar assigns each transaction a score from 0-99 based on the risk that it is fraudulent – 99 being the highest risk.
Through the Enhanced Issuer Network, issuers can incorporate Radar fraud scores directly into their own authorisation tools. This is already being done by Capital One with its Enhanced Decisioning Data API.
Stripe claims users of the Enhanced Issuer Network benefit from an average of 8% reduction in fraud and a 1 – 2% authorisation rate uplift on all eligible volumes processed with Capital One, Discover, and other major US issuers.
Capital One head of customer services and strategy Sarah Strauss said, “We’re thrilled to be a launch partner for Stripe’s Enhanced Issuer Network. With Capital One’s Enhanced Decisioning Data API, we can securely receive fraud scores from Stripe Radar that improve accuracy during the transaction authorization process.
“In particular, this makes legitimate transactions more likely to be approved. The partnership has already resulted in hundreds of millions of dollars in recovered revenue for businesses.”
Stripe had a rocky start to the year. The company reportedly saw its valuation cut by 11%, dropping from $74bn to $63bn.
The change in valuation was not caused by a new funding round, but a new 409A price change. The 409A valuations are set by third parties, meaning they are not tied to what investors think.
Last year, UK FinTech giant Revolut is to use Stripe, a financial infrastructure platform for businesses, to support payments in the UK and Europe and accelerate its expansion into new markets.
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