What features did you find interesting and useful in Trustev's authentication method? What are the potential disadvantages of Trustev's authentication method?

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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 opportunities. In fact, the analysts note that merchants reject approximately 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 entire countries. For example, in Europe only 6 percent of online merchants permit electronic transactions from another country. This problem provides the rationale for startup company, Trustev, which enables online retailers to accept 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 access to its systems. Trustev then crafts a profile for a regular online customer by observing transactions for a period of time. It collects 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 essence, 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 Kingdom tried out Trustev for four weeks. The company's goal was to stop fraudulent online transactions while letting through real customers who may be accidentally blocked. In just four weeks, the company noted a 5 percent revenue increase from blocking fraudulent transactions and another 6 percent increase from accepting customers who previously would have been blocked. 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 opportunities. In fact, the analysts note that merchants reject approximately 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 entire countries. For example, in Europe only 6 percent of online merchants permit electronic transactions from another country. This problem provides the rationale for startup company, Trustev, which enables online retailers to accept 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 access to its systems. Trustev then crafts a profile for a regular online customer by observing transactions for a period of time. It collects 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 essence, 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 Kingdom tried out Trustev for four weeks. The company's goal was to stop fraudulent online transactions while letting through real customers who may be accidentally blocked. In just four weeks, the company noted a 5 percent revenue increase from blocking fraudulent transactions and another 6 percent increase from accepting customers who previously would have been blocked.

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The features of Trustevs authentication method that are interesting and useful include Realtime anal... View the full answer