Fintech
Capital One partners with Adyen and Stripe to fight fraud
Jon Borman, head of anti-fraud strategy at Capital One, says that working with fintechs has led to approvals of over a billion dollars worth of transactions that would have been rejected: “They are trying to stop fraud on their part too , both for financial reasons and because it is a criminal activity that we are preventing,” he said of the partnership.
“So we had this light bulb moment where we realized we have exactly the same business model, so we can work together and fight fraud.”
How direct data sharing works
DDS represents a game changer for the industry. By making its Direct Data Share API available to both Adyen and Stripe, Capital One is building a robust network to identify and block fraudulent transactions across multiple platforms. For example, if Capital One detects fraud at a Stripe merchant and notices the same IP address attempting a transaction at an Adyen merchant, the system can block that transaction in real time. By sharing proof of good customer history, the API helps prevent false rejections, ensuring that legitimate transactions are not mistakenly blocked.
This partnership raises questions about Capital One’s intentions regarding its Discover the network. The move signals a commitment to building strong partnerships with buyers and merchants. This means a shift towards a more collaborative and inclusive fraud prevention strategy.
“We love this partnership because we can succeed together,” adds Borman. “Adyen merchants benefit from higher authorization rates and fewer chargebacks, just as Capital One cardholders benefit from fewer false positive declines and less fraud.”
While the DDS initiative represents a significant step forward, its long-term impact will depend on whether it extends beyond Capital One. If other financial institutions and networks adopted similar open source APIs, the potential benefits could be immense, creating a more secure and seamless e-commerce environment for all. However, if DDS remains exclusive to Capital One, the opportunity for widespread fraud prevention may be limited.
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