Form3, the cloud-native account-to-account platform, has launched a new authorised push payment fraud (APP fraud) prevention solution, powered by Feedzai, the anti-fraud and financial crime software provider.
The new product from Form3 and Feedzai is built using fully supervised machine learning, leveraging collaborative intelligence to understand the behaviour of both the payment sender and recipient, to determine the risk of the payment being made in real-time.
Form3’s new APP Fraud solution combines its account-to-account payment processing with Feedzai’s fraud and financial crime analytics, to create a model that identifies risk in both the individual sending the money and the person receiving the money. Understanding who is receiving the money is key to preventing fraud, as APP fraud involves impersonation that manipulates the victim into sending the money.
This new solution closes the gaps in intelligence that the fraudsters utilise to be able to use faster payments to target UK consumers and businesses. The solution’s model is then able to detect 95 per cent of fraud at market-standard false positive rates.
Mike Walters, CEO of Form3, commented: “The best way to tackle the rise of APP fraud is the use of collaborative intelligence and cutting-edge technologies that allow the real-time identification of scams within the payment message.
“By bringing together Form3’s payment processing expertise, and Feedzai’s fraud and financial crime solutions, we can tackle APP fraud so that UK banks can make faster payments safer. Feedzai is the solution provider of choice for two of the top four financial institutions in the UK, so we are partnering with a market leader to combat APP fraud.”
A £500million problem
Recognising that APP fraud losses account for nearly £500million per year, Form3 developed this new solution on the back of new regulation from the Payment Systems Regulator. This sees APP fraud victims given refunds by their bank from October 2024, with reimbursement now the responsibility of both the sending and the receiving institutions.
Pedro Barata, CPO at Feedzai, also added: “There is increasing regulation in this space, and rightly so – we’ve got to do everything in our power to protect the end consumer from APP fraud. With reimbursement becoming mandatory from October this year, it’s also in the interests of all banks to collectively ensure they prevent fraud and save huge payouts.
“By combining the expertise of Feedzai and Form3, we can drastically reduce the level of vulnerability in the payment process and give our customers the real-time intelligence that they need to stop fraudsters in their tracks.”
The partnership underscores Form3’s commitment to ‘doing well by doing good’, by employing technology to tackle the pervasive issue of fraud, which has profoundly impacted countless individuals worldwide.
The service will go live in April, with a full rollout in the UK market expected in the summer of 2024 – ahead of the implementation of the new rules in October 2024.
