Stripe, Adyen, and Capital One Unite to Combat Global Fraud Surge
Hey Payments Fanatic!
In an unusual move, Capital One has joined forces with payment powerhouses (and rivals) Stripe and Amsterdam-based Adyen to introduce a free fraud reduction product.
This innovative move was revealed by the financial services giant in an exclusive interview with TechCrunch.
Capital One's head of fraud strategy, Jon Borman, explained that despite their robust fraud protection models, the company faced limitations due to insufficient data.
To overcome this, they developed an open-source project called Direct Data Share.
This API enables merchants and others in the payment ecosystem to send real-time transaction data, which is particularly beneficial for e-commerce transactions that are generally less secure compared to in-person purchases where card verification is easier.
Direct Data Share allows a significant amount of transaction data to flow through Capital One’s API with every online purchase. This data helps the bank prevent fraud for a broader range of customers and merchants.
By partnering with Stripe and Adyen, Capital One enhances its ability to act as a data clearinghouse, detecting fraud across all their platforms.
“If we see an IP address through Stripe that turns out to be fraudulent, we can now use that same IP address to prevent fraud for transactions happening at Adyen, and vice versa,” Borman told TechCrunch.
This collaboration is also expected to reduce false declines—where legitimate transactions are wrongly flagged—and provide merchants with enhanced protection at no extra cost.
Borman highlighted that the partnership with these FinTech leaders has already resulted in the approval of over a billion dollars in transactions that would otherwise have been declined.
Pretty cool partnership if you ask me!
Cheers,
INSIGHTS
📊 𝐓𝐡𝐞 𝐒𝐭𝐚𝐭𝐞 𝐨𝐟 𝐁𝟐𝐁 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝟐𝟎𝟐𝟒 report, by Invoiced. Explore the current state of the B2B market alongside what shifts and advances we can all likely expect in upcoming years. Link here
PAYMENTS NEWS
🇵🇪 NPCI International and the Central Reserve Bank of Peru Partner to Develop UPI-Like Real-Time Payments System in Peru. This collaboration marks a significant milestone, making Peru the first country in South America to adopt the globally renowned Unified Payment Interface (UPI) technology, a symbol of India's pioneering excellence in digital payments.
🇬🇧 Payabl. expands Latin American payment options. UK-based paytech company Payabl. has announced the integration of four local payment methods in Latin America into its range of local payment solutions: PIX, Boleto, OXXO, and SPEI.
🇬🇧 Plend launches embedded credit API as an ethical alternative to Buy Now Pay Later. The ‘powered by Plend®’ API marks a significant technological leap forward, enabling organisations, customer-facing platforms, and institutions to embed affordable and longer-term credit options within their existing user journeys.
🇸🇬 HitPay, a Singapore-based commerce platform for SMEs, has earned a major payment institution (MPI) license from the Monetary Authority of Singapore (MAS). The license allows HitPay to offer merchant acquisition and money transfers, both domestic and cross-border, enhancing its core payment gateway services for SMEs.
🇨🇦 Zūm Rails, the company merging open banking and instant payments so businesses can use any payment rails they want, announced its work on a large-scale Banking as a Service (BaaS) project. Read the full piece here
🇸🇬 iPiD secures $5.3m in Pre-Series A round to strengthen global payments. These new funds will be utilized to accelerate the commercial rollout of iPiD’s Verification of Payee solutions in Europe. This includes assisting payment service providers (PSPs) in complying with the upcoming Verification of Payee regulation.
🇺🇸 EBay to stop taking American Express after fee dispute. EBay will drop AmEx cards as a payment option on the online marketplace because of “unacceptably high fees,” according to an email reviewed by Bloomberg News. EBay plans to notify customers this week about the change, which is set to take effect Aug. 17.
🇵🇱 Marqeta expands European footprint with opening of new office in Poland. Marqeta’s office in Warsaw will support the expansion of its card program management services, bringing its full range of platform offerings and expertise to the European market.
🇺🇸 CSG acquires Florida-based paytech iCG Pay in $17m deal. CSG says that the purchase will provide the company with new independent software vendor (ISV) channel partnerships and a “proven team of payments leaders” to help it expand its footprint in the North American payments market.
🇩🇪 Top lawyer of ex-Wirecard boss walks away after money runs out. Markus Braun under mounting pressure as trial of Germany’s largest corporate fraud continues. Click here for more info
🇺🇸 In an unusual move, Capital One is teaming up with Payment Giants (and rivals) Stripe and Amsterdam-based Adyen to offer a free product aimed at fraud reduction, the financial services giant told TechCrunch. By partnering with Stripe and Adyen with Direct Data Share, Capital One can act like a data clearinghouse, identifying fraud across all of their rails.
🇧🇪 Viva.com partners with Belgian Beobank, expanding its European synergies as an Acquirer Partner of Choice. The strategic partnership introduces a new partnership model for Belgium, to hasten the adoption of digital payments among Belgian SMEs, delivering a comprehensive business proposition that supports growth.
🇦🇺 Block has backtracked on plans to launch Cash App in Australia, and Nick Molnar says it will instead expand features inside the Afterpay app, including allowing users to “pay in four” when they spend at any retailer, under a new subscription service.
🇬🇧 emerchantpay partners with TrueLayer to launch Open Banking payments for merchants in the UK and Europe. With this solution, merchants can leverage this new payment option to allow customers to instantly connect to their online banking environment at checkout for a secure and frictionless payment experience.
➡️ Tokenization for Dummies. VGS's CEO Chuck Yu explains in 30 seconds. Check out the complete video for a 3 minute explainer and more info.
🪙 Visa looks to generative AI to enhance tokenisation. Mehret Habteab, senior VP of product and solutions at Visa Europe, told Finextra: “Not only is it powering up those merchants with the additional sales conversion, but it's driving really convenient, secure payment experiences for consumers.”
🇮🇹 Worldline rumored to acquire Credem’s Merchant Payment Services. A report of June 4 by Reuters, notes that this is the latest in a series of sales of banks’ “merchant books,” which banks have been unloading as technological advancements require new investments.
🇺🇸 Nium retains Unicorn status, raising US$50 Million in series E round at a $1.4 billion valuation. That is 30% below the valuation from its last funding round in 2022. Read the full article for further insights
GOLDEN NUGGET
The Banking Ecosystem — Core Banking vs BaaS, the new models to provide Banking services, Global Landscape & Key Trends👇
Core Banking vs. Banking as a Service (BaaS)
👉 Core Banking (Traditional):
🔸Definition — Core banking refers to the essential services provided by a bank, such as account management, loans, deposits, and transaction processing.
🔸Functionality — Core banking systems manage the day-to-day operations of banks, ensuring smooth and efficient handling of transactions and customer interactions.
🔸Technology — Historically, core banking systems were on-premise, but there is a significant shift towards cloud-based solutions for better scalability and flexibility.
🔸Traditional Banks: JPMorgan Chase & Co., Citi, HSBC, BNP Paribas
👉 Banking as a Service (BaaS):
🔸 Definition — BaaS is a model where 3rd-party providers offer banking services to non-bank businesses through APIs, enabling them to embed financial services.
🔸Functionality — BaaS providers offer services, including payments, lending, etc., allowing businesses to offer banking products without becoming fully licensed banks.
🔸Examples — Companies like Treezor and Toqio provide BaaS solutions, enabling other businesses to integrate financial services seamlessly.
🔸Fintech Companies: PayPal, Swan, Bankable, Starling Bank, Stripe
Key Trends & Drivers in Banking👇
1️⃣ - Regulation Continues to Drive Growth — Regulations are driving innovation, particularly around open banking, AML/KYC, client money handling, and credit/product suitability
2️⃣ - Convergence of Core Banking & BaaS — Traditional core banking providers and BaaS enablers are increasingly targeting both banks and non-bank clients, leading to a convergence in service offerings.I.e. Societe Generale acquiring Treezor & JPMorgan Chase & Co. partnering with Thought Machine
3️⃣ - Evolution of Macroeconomic Conditions — Rising interest rates have led to increased attractiveness of lending for non-bank players (BaaS and LaaS)
4️⃣ - SMEs need BaaS solutions — SMEs businesses have a growing interest for catered banking solutions providing access to credit / capital, spend management & cross-border payments.
5️⃣ - AI, a Game Changer — BaaS platforms are leveraging AI to enhance key banking operations, including client onboarding, credit risk management, and customer engagement.
6️⃣ - Growth of Embedded Finance — Embedded finance, where financial services are integrated into non-financial platforms, is driving new business models and customer engagement strategies.
The banking sector is undergoing significant transformation. Core banking remains the backbone of FinServ, while BaaS is emerging as a pivotal model for integrating financial services across various platforms 🚀
Source — Core Banking report by Royal Park Partners
Want your message in front of 100.000+ FinTech fanatics, founders, investors, and operators?
Shoot me a message on LinkedIn.
Comments ()