Arcot RiskFort™ Balances Risk Reduction with User Convenience

In 2000, Arcot co-wrote the 3-D Secure protocol with Visa, creating a simple and effective way to protect against transaction fraud. Today, Arcot is the de facto standard for card authentication and fraud reduction. Both issuers and merchants rely on 3-D Secure to verify and protect their cardholders' identity.

ADS opt-out: pros and cons

Activation During Shopping (ADS) requests additional authentication, thereby reducing cardholder fraud. However, the ability to opt-out of the additional authentication, a feature required by Visa and MasterCard, allows for cardholder abuse through opting out.

Benefit: Offers additional authentication while giving consumers the ability to opt out, allowing for an uninterrupted shopping experience.

Disadvantage: Fails to fully authenticate fraudulent cardholders by allowing the user to opt out.

The card issuer, the merchant and the buyer all face the same problem: How to balance security against user convenience.

The solution: risk-based authentication

Risk-based authentication offers a solution everyone can be pleased with. Risk-based authentication sets another layer of protection for card issuers against fraudulent shoppers who opt-out of enrolling, and is invisible to legitimate cardholders. On a transaction-by-transaction basis, it analyzes data involved in each transaction to identify the potential fraudulent activity.

Risk-based authentication either allows legitimate users to pass unchallenged, or offers them a choice to enroll with opt-out privileges if they engage in behavior that matches their profile and the card issuer's authentication policies. Essentially, it mandates that risky users authenticate themselves and enroll in the program, or they cannot complete their purchase.

Arcot RiskFort: the leader in risk-based authentication

Arcot RiskFort™ is a risk-based authentication application providing this extra layer of protection that reduces fraud without the inconvenience of mandatory ADS. RiskFort assesses the risk of every transaction in real time by examining data collected automatically during the transaction. This includes:

• All merchant data (merchant ID, merchant location and merchant category)
• Transaction data (transaction amount and transaction currency)
• Session data (IP address of shopper, device ID of the shopper and shopper's device)

RiskFort compares the current contextual information with historical data and statistical analysis to identify anomalous activity, and then calculates a risk score for the transaction.

Smoother, more reliable transactions

With RiskFort added to 3-D Secure Card Authentication programs, card issuers can reduce fraud, with the ability to approve or decline the transaction, ask for further authentication or alert customer service. The result: smoother, more reliable transactions.

Arcot Systems provides a variety of easy-to-use and effective online security solutions, including TransFort™ for Issuers and TransFort™ for Merchants. For further information, contact Arcot at 408-969-6100 or visit www.arcot.com.