Cybersecurity North America Paytech

Outseer Addresses Synthetic Identity and Account Takeover Fraud With BNPL Instalments Solution

The payment authentication and monitoring solutions provider Outseer has introduced a new Buy Now, Pay Later (BNPL) instalments solution that supports end-to-end protection to fight against rising cases of Synthetic Identity and Account Takeover (ATO) fraud.

The launch of Outseer Emerging Payments is the company’s first step beyond its Outseer 3-D Secure payment authentication offering; an Access Control Server (ACS) for credit and debit card issuers and processors which was launched in September 2021. BNPL Installments represents the first Outseer payments solution within the new Outseer Emerging Payments platform.

BNPL-centred paytech has experienced an astonishing rise to prominence, with 54 per cent of UK consumers forecast to embrace the technology at some point in 2022. This evolving attitude is thought to be in response to rising inflation and the growing need for flexible payment options outside of traditional counterparts; like credit cards for example.

The rapid acceleration of digital transformation has evolved commerce models across the spectrum of pay before, pay now, and pay later options. With more methods and places for people to pay, opportunities to drive new digital commerce growth are expanding well beyond traditional card-not-present (CNP) transactions.

But with payment fraud evolving, the ecosystem must be prepared for new risks. According to The Aite-Novarica Group, CNP fraud now accounts for over half of all gross fraud losses which is expected to reach $17.2billion by 2023. Through this investment in emerging payment solutions, Outseer will enable an entire ecosystem of customers, financial institutions, merchants, and other fintech providers to deliver more secure programs by providing continuous authentication and protection.

Reed Taussig, CEO of Outseer
Reed Taussig

“Outseer is the culmination of decades of science-driven innovation in anti-fraud and payments authentication solutions,” said Reed Taussig, CEO of Outseer. “This announcement is a critical next step. Our strategic investment in Outseer Emerging Payments delivers essential continuous authentication across the payments journey, protecting against fraud across all interactions and transaction types.”

The new BNPL Instalments solution supports the explosion in instalment payments. According to Insider Intelligence, global spending through BNPL is set to hit $680billion in volume by 2025.

As BNPL instalment usage explodes, fraudsters are capitalising on these trends. Two of the most prevalent forms of fraud perpetrated in BNPL instalment use cases are Synthetic Identity fraud and Account Takeover (ATO) fraud. Synthetic identity fraud is a $6billion problem, and according to the FBI, is one of the fastest-growing types of financial crimes. ATO fraud growth has been fueled by the surge in data breaches in recent years, increasing 850 per cent between Q2 2020 and Q2 2021.

Outseer’s BNPL Installments solution is designed to address these and other fraud scenarios to provide continuous authentication throughout the digital payments journey. This includes end-to-end protection for cardholders as they enrol, shop and pay, and manage their instalment transactions.

Julie Conroy, Head of Risk Insights and Advisory at Aite-Novarica Group
Julie Conroy

“The growing popularity of BNPL over the past couple of years has attracted the attention of fraudsters as well,” said Julie Conroy, Head of Risk Insights and Advisory at Aite-Novarica Group. “This increases the urgency for BNPL-focused fraud solutions that can accurately verify identities and detect anomalies while not putting barriers in front of good prospective customers.”

“Innovating in the payments category must balance security, convenience, and choice for consumers. Outseer has made investments to safeguard all consumers however they want to shop, and to enable the ecosystem to serve this mission,” added Taussig.

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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