How Worldpay & Capital One Tech is Combating Payment Fraud

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Capital One and Worldpay have launched a data sharing initiative to reduce false payment declines
Worldpay & Capital One use advanced machine learning and real-time data sharing to reduce payment fraud, false declines and enhance transaction security

The payments industry faces growing challenges from sophisticated fraud schemes and complex transaction ecosystems.

Global e-commerce sales are projected to rise in 2025, putting pressure on payment processors and financial institutions to balance robust security with seamless customer experiences.

This delicate equilibrium is vital for maintaining consumer trust and fostering continued growth in digital commerce across various sectors and geographies.

Against this backdrop, Worldpay, a leading payments technology company processing over 50 billion transactions annually across 146 countries, has announced a collaboration with Capital One, a major US-based digital banking and credit card issuer.

The partnership aims to optimise payment fraud detection and enhance transaction security through an innovative data sharing agreement.

Enhanced fraud detection capabilities

The cornerstone of this collaboration is the integration of Worldpay's FraudSight platform with Capital One's fraud risk decisioning engine.

FraudSight, Worldpay's machine learning-based fraud detection system, will now have direct access to Capital One's transaction data, enabling real-time risk assessment for payments made using Capital One cards.

This data sharing initiative is expected to yield significant improvements in fraud detection accuracy.

Cindy Turner, Chief Product Officer at Worldpay, emphasised the significance of this collaboration: "Our data sharing collaboration with Capital One enhances the effectiveness of Worldpay's innovative FraudSight solution and drives better outcomes for our merchants using the solution".

Chief Product Officer at Worldpay, Cindy Turner

According to Capital One's internal results, the Direct Data Share (DDS) programme could reduce false positive declines by up to 40%.

False positives, which occur when legitimate transactions are incorrectly flagged as fraudulent, currently affect approximately 6% of e-commerce transactions, with up to 10% of these being incorrect rejections.

This means that the partnership represents a shift in the payments industry towards collaborative fraud prevention.

Global fraud impact:
  • £38bn lost to online payment fraud globally in 2023
  • 6% of e-commerce transactions currently rejected due to fraud suspicion
  • Up to 10% of declined transactions are false positives

Traditional fraud detection systems often operate in isolation, leading to higher rates of false positives as each entity makes decisions based on limited data sets.

Therefore, by sharing data in real-time, Worldpay and Capital One aim to create a more comprehensive and accurate fraud detection system.

Merchant benefits and implementation

US-based merchants utilising Worldpay's payment services and FraudSight solution will automatically benefit from this enhanced fraud detection capability when processing Capital One card payments.

The system is designed to operate across multiple payment channels, including e-commerce, mobile payments and point-of-sale transactions.

Chief Product Officer at Worldpay, Cindy Turner

Cindy Turner, Chief Product Officer at Worldpay, emphasised the significance of this collaboration: "Our data sharing collaboration with Capital One enhances the effectiveness of Worldpay's innovative FraudSight solution and drives better outcomes for our merchants using the solution".

The initiative is particularly beneficial for merchants in high-risk sectors such as digital goods, travel and luxury retail, where false declines can significantly impact revenue.

By enabling more accurate fraud detection without increasing transaction processing times, the partnership aims to strike a balance between security and customer experience.

Jon Borman, Head of Fraud Strategy at Capital One, highlighted the broader implications of this partnership: "Our Direct Data Share tool is being offered to Worldpay as a free, secure and compliant product that allows their merchants using FraudSight to participate.

Jon Borman, Head of Fraud Strategy at Capital One

“By enhancing our data and information sharing, we're not just cutting fraud, we're setting a new standard for seamless and secure transactions.”

The collaboration comes at a time when global online payment fraud losses reached US$48bn last year, with fraudsters increasingly targeting cross-border transactions and mobile commerce platforms.

So by combining their resources and expertise, Worldpay and Capital One aim to address these challenges while improving legitimate transaction approval rates across multiple payment channels.

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While the current focus is on US-based merchants, the partnership establishes a framework for potential international expansion.

Worldpay's global presence, spanning 146 countries and 135 currencies, positions the initiative for potential deployment across multiple markets.

As the payments landscape continues to change, collaborations like this between major industry players perhaps are likely to become more common.

By sharing data and resources, companies can create more robust fraud prevention systems while improving the overall customer experience.

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