IT'S About Business 7.3 data on 80 variables including the customer's device (e.g., desktop, laptop, smartphone), Internet Protocol address, shipping address, physical location, e-mail address, and other relevant data. In es- sence, Trustev creates a digital picture of the customer at the point in time of a transaction. To protect data security, the company by law must erase all data after 90 days. Trustev is growing rapidly. One company in the United King- dom tried out Trustev for four weeks. The company's goal was to stop fraudulent online transactions while letting through real cus- tomers who may be accidentally blocked. In just four weeks, the company noted a 5 percent revenue increase from blocking fraudu- lent transactions and another 6 percent increase from accepting customers who previously would have been blocked. In another example, in September 2014, Radio Shack (www.radioshack.com) announced that it would install Trustev in its 4,000 stores in the United States in a multimillion-dollar deal. And the results? In Trustev's first year of operation, the com- pany was named Europe's Top Technology Startup by the European Union Commission as well as one of Forbes Hottest Global Startups. MIS Trustev: Helping to Prevent Credit Card Fraud Many millions of people have been the victim of credit card fraud but with thankfully minimal damage. The reason is that, for the most part, these people are not liable for fraudulent use of their cards. Industry analysts claim that electronic commerce is unfair to merchants because they assume all of the risk in credit card transactions. Merchants also suffer most, if not all of the financial damages in fraudulent transactions. The overall effect is that many online retailers fear fraud so much that they limit their business op- portunities. In fact, the analysts note that merchants reject approx- imately 2 percent of legitimate customers. This number is more damaging than it might appear, because merchants suffer hidden costs as well. The cost to acquire an online customer is about $51 per customer. If merchants block a legitimate customer, then they lose the $51. More significantly, they lose the lifetime value of that customer because he or she is not likely to return to the Web site after being denied. Going further, some merchants block transactions from en- tire countries. For example, in Europe only 6 percent of online merchants permit electronic transactions from another country, And then there is China, which has a huge demand for high-end merchandise. Since 2010, Chinese citizens have been issued three billion credit cards. Nevertheless, Chinese consumers often cannot shop on foreign retailers' Web sites because few merchants accept payments from China due to fraud concerns. This problem provides the rationale for startup company, Trustev (www.trustev.com), which enables online retailers to ac- cept more online transactions. The company helps reduce fraud by analyzing customer behavior while they browse and buy online, Using this analysis, Trustev takes roughly two-tenths of a second to decide whether to accept each transaction. In essence, Trustev validates the shoppers themselves, not just their payment method. When first launching the service, merchants give Trustev ac cess to its systems. Trustev then crafts a profile for a regular online customer by observing transactions for a period of time. It collects Sources: Compiled from "Are You Who You Say You Are?" University of New South Wales Business Think, April 22, 2015; R. Bradbury, "How 5% of Online Revenues Are Tossed Away," Trustev Blog, April 22, 2015; K. Russell, "Trustev Uses Fraud Detection Software to Crack Down on Internet Trolls," TechCrunch, December 9, 9, 2014; J. Temperton, "Digital Fingerprinting Could Stop Web Trolls for Good;" Wired, December 18, 2014; J. Kennedy, "Cork's Trustev in Multimillion Dollar Security Deal with RadioShack." Silicon Republic, September 5, 2014; J. McManus, "Catching Credit Card Cheats from Cork to China," The Irish Times, July 11, 2014; "Trustev Taps Datameer Big Data Analytics for E-Commerce ID Verification," Finextra, March 5, 2014; www.trustev.com, accessed July 29, 2015 Questions 1. Describe how Trustev's authentication method differs from other authentication methods. 2. What are potential disadvantages with Trustev's authentica- tion method? IT'S About Business 7.3 data on 80 variables including the customer's device (e.g., desktop, laptop, smartphone), Internet Protocol address, shipping address, physical location, e-mail address, and other relevant data. In es- sence, Trustev creates a digital picture of the customer at the point in time of a transaction. To protect data security, the company by law must erase all data after 90 days. Trustev is growing rapidly. One company in the United King- dom tried out Trustev for four weeks. The company's goal was to stop fraudulent online transactions while letting through real cus- tomers who may be accidentally blocked. In just four weeks, the company noted a 5 percent revenue increase from blocking fraudu- lent transactions and another 6 percent increase from accepting customers who previously would have been blocked. In another example, in September 2014, Radio Shack (www.radioshack.com) announced that it would install Trustev in its 4,000 stores in the United States in a multimillion-dollar deal. And the results? In Trustev's first year of operation, the com- pany was named Europe's Top Technology Startup by the European Union Commission as well as one of Forbes Hottest Global Startups. MIS Trustev: Helping to Prevent Credit Card Fraud Many millions of people have been the victim of credit card fraud but with thankfully minimal damage. The reason is that, for the most part, these people are not liable for fraudulent use of their cards. Industry analysts claim that electronic commerce is unfair to merchants because they assume all of the risk in credit card transactions. Merchants also suffer most, if not all of the financial damages in fraudulent transactions. The overall effect is that many online retailers fear fraud so much that they limit their business op- portunities. In fact, the analysts note that merchants reject approx- imately 2 percent of legitimate customers. This number is more damaging than it might appear, because merchants suffer hidden costs as well. The cost to acquire an online customer is about $51 per customer. If merchants block a legitimate customer, then they lose the $51. More significantly, they lose the lifetime value of that customer because he or she is not likely to return to the Web site after being denied. Going further, some merchants block transactions from en- tire countries. For example, in Europe only 6 percent of online merchants permit electronic transactions from another country, And then there is China, which has a huge demand for high-end merchandise. Since 2010, Chinese citizens have been issued three billion credit cards. Nevertheless, Chinese consumers often cannot shop on foreign retailers' Web sites because few merchants accept payments from China due to fraud concerns. This problem provides the rationale for startup company, Trustev (www.trustev.com), which enables online retailers to ac- cept more online transactions. The company helps reduce fraud by analyzing customer behavior while they browse and buy online, Using this analysis, Trustev takes roughly two-tenths of a second to decide whether to accept each transaction. In essence, Trustev validates the shoppers themselves, not just their payment method. When first launching the service, merchants give Trustev ac cess to its systems. Trustev then crafts a profile for a regular online customer by observing transactions for a period of time. It collects Sources: Compiled from "Are You Who You Say You Are?" University of New South Wales Business Think, April 22, 2015; R. Bradbury, "How 5% of Online Revenues Are Tossed Away," Trustev Blog, April 22, 2015; K. Russell, "Trustev Uses Fraud Detection Software to Crack Down on Internet Trolls," TechCrunch, December 9, 9, 2014; J. Temperton, "Digital Fingerprinting Could Stop Web Trolls for Good;" Wired, December 18, 2014; J. Kennedy, "Cork's Trustev in Multimillion Dollar Security Deal with RadioShack." Silicon Republic, September 5, 2014; J. McManus, "Catching Credit Card Cheats from Cork to China," The Irish Times, July 11, 2014; "Trustev Taps Datameer Big Data Analytics for E-Commerce ID Verification," Finextra, March 5, 2014; www.trustev.com, accessed July 29, 2015 Questions 1. Describe how Trustev's authentication method differs from other authentication methods. 2. What are potential disadvantages with Trustev's authentica- tion method