According to Mastercard, in 2023 over $400bn was lost by Financial Institutions across digital and non-digital payments; to account-to-account fraud through Authorised Push Payment (APP) fraud, mule accounts, micro-structuring and identity theft. This is alongside the +$100bn lost by online merchants to friendly fraud (or first-party fraud).

This happened despite the existence of a myriad of solutions catering to fraud prevention along the consumer journey. From protection against account takeover and identity theft at account opening and authentication, to fraud during online payments like 3DSecure, to an array of solutions aimed at responding to the effects of chargeback fraud like dispute management systems and chatbots.

Why is this happening? What is missing?

The problem is that the payment ecosystem addresses fraud in siloes.

And these siloes create a visibility gap that enables fraudsters to thrive.

Eliminating this visibility gap requires data sharing across the payments ecosystem; from consumers, to merchants and issuing banks.

Data-sharing likely seems like an obvious solution to this problem (obvious, not easy).

So the next question should be “what is preventing data-sharing”?

The Payments Association, in a paper titled ‘Data Sharing to Prevent Economic Crime’, shared survey results covering the reasons why data sharing was not already occurring across the payments ecosystem.

The findings - 7 major barriers identified by payments industry respondents:

Beyond this survey’s respondents, experts from a range of payments organisations reported that a lack of infrastructure was the major barrier to data sharing.

We agree that the fundamental issue is the lack of data-sharing infrastructure, technology that solves for data protection and data consistency across the industry by design.

We’re excited by what the next generation of fraud prevention technology looks like and the value it will unlock, beyond fraud prevention.

At Trudenty, we’ve started with leveraging data-sharing across the payments ecosystem to prevent first-party fraud and improve the experiences of trusted consumers.

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Is your business is battling with first party fraud; whether INR, return-and-refund fraud, wardrobing, BNPL fraud or chargeback fraud?

Contact us for a chat to discuss how we can help.

If you’re an organisation in the payments or financial ecosystem exploring data-sharing for other use cases related or tangential to fraud prevention and risk management, we would love to speak with you too.