12 Best Fraud Detection Software and Tools in 2023
Last Updated: January 09, 2023 by Bence Jendruszak
Your business is growing, payments are flowing in and customers are delighted. But at some point, inevitably, fraudsters rear their ugly heads and start targeting you.
You’re not alone. The fraud management industry is set to grow to USD 38.2 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 12.8%, which proves that companies aren’t afraid to spend money on protection.
Now, these fraudulent attacks can take many forms: opening multiple accounts to claim your promos, stealing other customers’ accounts, or, most commonly, paying using stolen credit card details on your site. And dozens of other possibilities.
Whatever the case, you’re often the one who has to pay for these crimes – in loss of revenue, customers, chargeback costs or compliance fines.
Something has to be done, right? Enter fraud detection software.
List of the Best Fraud Detection Software
- SEON: Granular, Flexible and Transparent
- Signifyd: Automated Fraud Fighting for Merchants
- Sift: One of the Fastest Growing Anti-Risk Vendors
- Kount: Enterprise-Grade Fraud Detection
- Emailage: Reverse Email Lookup Specialists
- ArkOwl: Live Data Enrichment from Several Sources
- Ekata: Part of Mastercard Group
- TruValidate: An iGaming Staple
- ThreatMetrix: Protection, Seamlessness, Personalization
- Cybersource: Modern, Modular Platform for Growth
- FraudHunt: Affordable Security for Emerging Markets
- Accertify: Dynamic Automation to Suit Your Preference
What Is Fraud Detection Software?
Fraud detection software is designed to monitor, investigate and block fraudulent activity on your website. It’s frequently used to prevent fraudulent transactions made with stolen cards or identities.
Companies can also rely on fraud detection software and tools to confirm users at signup and login, as well as other touchpoints.
SEON offers a fully modular fraud solution that doesn’t weigh down the customer experience. Enjoy machine learning, data enrichment and the support of a team of experts in online fraud.
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Top Features of Fraud Detection Software
Fraud detection software should cover a lot of bases, from chargeback prevention to identity verification. Here are examples of must-have features:
- Risk rules: The cornerstone of fraud detection. Risk rules allow you to filter user actions based on the data you find. A basic risk rule would be: If the IP address belongs to a VPN, block the login attempt.
- Risk scoring: Some rules can be static. with the simple option to allow or reject user actions. More sophisticated systems let you play around with scores and thresholds, which give you a gauge of how risky an action is. For example: If a customer is not based in the same country as their payment card, add 5 points to their risk score.
- Real-time monitoring: Consider your needs. When it comes to preventing chargebacks or to complying with anti-money laundering regulations, your detection software must be able to monitor payments on your site. For ID verification and account protection, you must also be able to immediately block a suspicious action before it’s too late.
- Machine learning engine: Chances are that you’ll be poring over huge volumes of data. The best fraud prevention software will include an ML, or machine learning algorithm, that can help suggest risk rules based on your historical business data. Bonus points if it’s a whitebox system that allows you to understand the reasoning behind the risk rules.
The Best Fraud Detection Software in 2023
Without further ado, let’s look at our list of the best fraud detection software for the year – including pros and cons and which problems they solve the best.
|Disclaimer: Everything you’ll read in this article was gleaned from online research, including user reviews. We did not have time to manually test every tool. This article was last updated in Q1 2023. Please feel free to contact us to request an update/correction.|
SEON – Granular, Flexible and Transparent
SEON prides itself on being accurate, granular and industry-agnostic.
When it comes to tools and technology, SEON features include in-depth device fingerprinting (to understand how users connect to your website), complete data enrichment based on an email address, IP address or phone number, and a way to check 50+ social media and online networks for related user info that will reveal your customers’ true intentions.
The integration is also flexible thanks to the API calls, and many businesses even use SEON as an extra layer of protection for data enrichment only (available via a Chrome plugin, among others).
Last but not least, you get complete control over the risk rules, and you can even get suggestions from a powerful machine learning engine that suggests them based on your historical business data.
Notable SEON customers include Patreon, Air France, Avis, Ladbrokes and LeoVegas.
Pros of SEON
- Fully modular solution: Pick and choose the modules that make sense based on your fraud risk, from transaction fraud to Matched betting multi-accounting.
- Whitebox machine learning: Get rule suggestions in human-readable language so you can test and tweak them yourself.
- Reverse social media lookup: Gather data from 50+ online signals including LinkedIn, Twitter, Telegram and more to get a 360-degree view of your users.
- Transparent pricing: Pay monthly based on your needs.
- Free trial: See for yourself how SEON can help reduce fraud rates without going through sales demos.
- Outstanding CX: SEON puts the user front and center, whether it’s thanks to a clean GUI or free ongoing support, helping you provide an ideal customer experience.
Cons of SEON
- No on-site integration: Enterprise clients might need to look elsewhere if they need to control the integration with their onsite tech stack.
- No IDV checks: There is currently no functionality to verify customers based on their official IDs.
- Pay-per-API-call model. Starts at $299 per month. A free version is available.
Choose SEON If:
- It’s important to you to be protected without introducing friction to the customer experience.
Signifyd – Automated Fraud Fighting for Merchants
You’ll be in capable hands with Signifyd’s team. After leaving PayPal, two engineers turned their expertise towards fraud software development, with a specific focus on enterprise ecommerce clients.
Signifyd now protects 10,000 online stores globally, helping them prevent chargebacks via three key products: Revenue Protection, Abuse Protection and Payments Optimization.
Their products are specifically geared towards high volumes of transactions, and they even automate chargeback protection via a chargeback-guarantee model, where they assume payment for chargeback admin fees.
Notable Signifyd customers include Samsung, Philips, and Omega.
Pros of Signifyd
- Automated chargeback prevention: It’s not quite plug-and-play, but Signifyd is designed to run on autopilot with minimum user input.
- Covers other ecommerce fraud challenges: Return abuse and friendly fraud, among others.
- PSD2-compliant: The Payments Optimization module works with Strong Customer Authentication (SCA), which helps with compliance for EU-based payments.
Cons of Signifyd
- No real-time data: Relying on databases can work. But you’re missing a piece of the puzzle, because fraudsters move fast.
- Conflict of interest: A chargeback guarantee model can be great for small merchants. But you could also be losing business to an overzealous prevention tool.
- N/A. You’ll need to speak to a sales team to get an idea.
Choose Signifyd If:
- You want automation and you are dealing with large volumes of transactions.
Sift – One of the Fastest Growing Anti-Risk Vendors
Launched in 2011, Sift is now a $1 billion company, funded in part by startup accelerator Y Combinator. They offer fraud protection for a whooping 34,000 sites and apps, including world-renowned names such as Airbnb and McDonald’s.
Its key products include a Digital Trust and Safety Suite, which combines all the individual API tools into one complete solution. Then, there is a module specifically designed to authenticate users and to avoid ATO attacks, which includes the ability to enable 2FA at the same time.
For all your chargeback challenges, Sift offers a Payment Protection product, which uses the data from its global network. It analyzes payment information in real-time and uses machine learning to develop new risk rules.
Finally, you can also purchase the Dispute Management module, which is specifically designed to help monitor and log as much data as possible when going through a chargeback resolution process.
Among Sift’s customers we find Airbnb, McDonald’s and Doordash.
Pros of Sift
- Strong enterprise focus: While targeting the biggest companies, Sift offers plenty of products and tools to offer enough customization for your fraud fighting.
- Chargeback resolution module: A great way to accept a certain percentage of chargebacks without increasing false positives, but while also having enough resources to fight fraudulent cases.
- Content security add-on: Sift doesn’t specifically do anti-fraud; there is also an overlap with cybersecurity. The Content Integrity product, for instance, blocks spam, scams and malicious content on your site too.
Cons of Sift
- Blackbox AI: What you gain in ease of use, you lose in terms of being able to understand why the AI suggests certain risk rules.
- No real-time social media checks: An important piece of the puzzle when it comes to ID proofing, reverse social lookup isn’t available with Sift.
- No free trial: You’ll need to go through the lengthy demo and sales calls before you can sign up for a contract and try Sift.
- Available upon request to the sales team.
Choose Sift If:
- You prioritize ease of use and also have cybersecurity needs to address.
Kount – Enterprise-Grade Fraud Detection
Founded by Brad Wiskirchen after he wrote his idea “on the back of a napkin during a sushi lunch”, Kount soon grew into a fraud detection behemoth, with 15,000 clients across the world. It was acquired by Equifax in early 2021.
Kount is focused on innovative risk tech (it owns 30 technology patents) and enterprise clients, such as Barclays, PetSmart, Staples and Chase, among others. They offer everything you need for CNP (card not present) fraud monitoring and protection via Kount Command.
For ID verification, you’ll need to purchase access to the Kount Identity Trust Global Network, which captures data from 32 billion user interactions per year, as it has done for the last 13 years.
Kount Central is more specifically built for payment providers – hence its relationship with Barclays and Chase – and Kount Control is the account takeover prevention solution.
Pros of Kount
- Covers many industries: The variety of products available on offer means you can use Kount for a high-volume payment gateway or a tier 1 ecommerce brand.
- Automated and customizable rules: Tailor rules to automate chargeback prevention or reduce manual review time, among others.
Cons of Kount
- Limited ML capabilities: Despite custom rule creation capabilities, the machine learning features are not up to par with some newer solutions on the market, according to reviews.
- Lack of data enrichment: Your fraud prevention accuracy is as good as the data you have access to. Unfortunately, with limited data points, your fraud-fighting gets harder.
- Available after a sales call.
Choose Kount If:
- You are looking to cover various risktech needs in one go.
Emailage – Reverse Email Lookup Specialists
An email address is a powerful data point if you know how to get the most info from it. It’s exactly what LexisNexis’s Emailage specializes in so you can get a customer profile with an associated risk score based on an email address only.
Despite starting off as a startup, Emailage’s technology is now incorporated into LexisNexis, a huge cybersecurity and risk management corporation, which has helped it access data from 30 million fraud events a year and 5.9 billion digital identifiers worldwide.
While Emailage claims to have customers in a variety of industries including fintech, online gaming, OTA and ecommerce, among others, its official clients don’t appear on the website. However, any industry insider will tell you this vendor is very well regarded.
Pros of Emailage
- Real-time alerts: As far as email data enrichment goes, you get instant results.
- Part of the LexisNexis Risk Network: If you buy more of the suite of products, you should get seamless integration.
Cons of Emailage
- Not enough real-time intelligence: Emailage relies on email data enrichment only. Sophisticated fraudsters can still slip through the cracks.
- No device fingerprinting: Spotting multi-accounting users is difficult without knowing what kind of devices they use.
- Available after contacting the sales team.
Choose Emailage If:
- You have at your disposal customer emails and want to learn from them.
ArkOwl – Live Data Enrichment from Several Sources
Founded in 2012, ArkOwl was developed by GitLab engineer Mike Greiling along with Rob Daline, before joining NICE Actimze’s platform-as-a-service in 2019.
ArkOwl’s key selling point? Its ability to pull data from fresh databases such as social networking sites, WHOIS databases, webmail hosts, service providers and more. It can perform data enrichment based on an email address, phone number or IP address – for instance, when looking at domain information.
Pros of ArkOwl
- Real-time live social media: The system checks several social media websites for fresh user data.
- Flexible pricing structure: You can choose to pay via a monthly subscription, prepaid bundles or pay as you go (API calls).
Cons of ArkOwl
- Limited capacity: Being a small operation means fewer resources for customer service.
- Not suitable for all fraud challenges: Data enrichment is great as an add-on for a multi-layered approach – not so much for fully fledged anti-fraud software.
- Only 7+ social network checks: Fine for the most common markets, but lacking in emerging economies.
- Not available. You do get a free trial, though.
Choose ArkOwl If:
- You want to add more open data points to a pre-existing fraud prevention stack.
Ekata – Part of the Mastercard Group
Another mature and well-established fraud detection software. Founded in 1997 (originally under the name Whitepages), Ekata offers global identity verification and fraud prevention via APIs, including a Transaction Risk API, Address Risk API and Phone Intelligence API.
The anti-fraud vendor also offers two onboarding APIs (Merchant and Account) as well as a Pro Insight tool designed specifically for manual reviews.
Acquired by Mastercard in 2021, Ekata has first-hand experience with enterprise clients such as Lyft, Equifax and Microsoft.
Pros of Ekata
- Dedicated manual review tool: Ekata offers a complete solution for reviewing transactions and KYC checks manually, including machine learning algorithms (the Ekata Identity Engine).
- Graph visualization: Sold as the separate Ekata Identity Graph product.
- Brand recognition: If it’s good enough for Microsoft, you should be able to trust it.
Cons of Ekata
- No real-time data analysis: As is often the case with legacy anti-fraud software, they rely on their humongous databases built over the years. It doesn’t make the data good.
- Expensive, lengthy contracts: We don’t have a clear figure, but some online reviews mention the need for a large budget to integrate Ekata.
- Enterprise-level contracts at an undisclosed price on the website. Speak to their sales team for more info.
Choose Ekata If:
- You have an in-house manual review team that deals with high volumes.
TruValidate (formerly Iovation) – An iGaming Staple
Don’t let the multiple name changes confuse you: TruValidate (formerly TransUnion and Iovation) is a well-established iGaming fraud prevention specialist that has been operating since 2004.
Their key product is a device recognition technology designed to help authenticate users and it’s pretty much the defacto fraud detection software of the iGaming world. However, the software is also prevalent in the fintech, credit union, healthcare and ecommerce industries too.
Key products include a fully customizable authentication solution, document verification via a proprietary database and biometric verification. On TruValidate’s customer roster one finds Kaidee, Playcherry and Gocompare.com
Pros of TruValidate
- Native device fingerprinting: To check the configurations of software and hardware users rely on to connect to your website.
- Part of the TransUnion ecosystem: While all the products are sold separately, you can expect seamless integration between all TransUnion’s services.
- iGaming expertise: TruValidate is the most famous fraud detection software in the real-money online gaming world.
Cons of TruValidate
- Stale data: A massive database is useful but sometimes having less data that is fresher fares better.
- No real-time data enrichment: You’re relying on an extremely large database but not on open source info such as social media data.
- No free/batch trial: Prepare for a lengthy onboarding via multiple sales calls before you can test TruValidate.
- Available upon request.
Choose TruValidate If:
- Certainly one to consider if you are an iGaming brand looking for a well-known vendor.
ThreatMetrix – Protection, Seamlessness, Personalization
Founded in Australia in 2005, ThreatMetrix was later acquired by the LexisNexis Risk Solutions platform, which also includes the aforementioned Emailage. By leveraging the huge databases of LexisNexis’ parent company, RELX Group, ThreatMetrix’s trust decisions and fraud detection are informed by 78 billion records, with 270 million transactions being processed and analyzed daily.
The main products offered by the software suite are designed to be a complete fraud prevention platform, with modules covering device intelligence, identity authentication, community-based data enrichment, behavioral biometrics, and automated decisioning. At the contract level, ThreatMetrix has services available to cater to distinct verticals, and to large-scale businesses in particular.
As for who uses ThreatMetrix, according to reports, this vendor’s customers include SunTrust Banks, United Healthcare and The North Face clothing.
Pros of ThreatMetrix
- ThreatMetrix Consortium: connecting customers in vertical-specific communities to share insights and collected fraud data.
- On-site integration: ThreatMetrix offers to send a human fraud partner to support the integration of the product into your existing architecture.
- ThreatMetrix Mobile: A software development kit specifically to improve the security of the mobile device channel.
Cons of ThreatMetrix
- Part of larger software portfolio: ThreatMetrix does not handle all aspects of fraud prevention in a customer journey, so modules like payment-specific security have to be purchased separately and integrated.
- Less payment flexibility: ThreatMetrix does not currently have a free trial option, and its focus on enterprise-level businesses that will purchase multiple suites from the LexisNexis stack puts it at a decidedly high price point.
- Not currently listed online. Contact the sales team for a quote.
Choose ThreatMetrix If:
- You use other LexisNexis products and would like to add a fraud prevention platform.
Cybersource – Modern, Modular Platform for Growth
As Visa’s proprietary fraud solution, the expectations for this software are naturally high. Cybersource was founded in 1994, and pioneered online payment as soon as ecommerce became a reality, then vastly expanded its capabilities by acquiring Authorize.net in 2007.
In terms of sheer processing and analytical power, Cybersource offers four main modules to address payment fraud, all of which are powered by Visa’s Decision Manager software, which processed some 32 billion transactions last year. Those main modules for payment acceptance, fraud management, payment security, and unified commerce payment solutions come together to provide automated end-to-end service for ecommerce payments.
In particular, the unified payment solution allows businesses to easily transition between payment models, like BNPL, as well as take on new forms of payment currency with confident fraud protection. Other granular modules in the suite are also dedicated to helping merchants grow their reach, with capabilities for currency conversion, global tax compliance, and customer lifetime management.
Cybersource’s customers include Zoom, Rimowa and Colgate-Palmolive.
Pros of Cybersource
- Growth-specific software modules: Cybersource has leaned into being a provider for companies upscaling their growth, and has modules specifically for both diversifying payment models and streamlining them, with super low friction 3DS-backed click-to-pay deployable.
- Dynamic data analysis: The fraud detection module constantly updates its ML statistical models and also dynamically applies the best model for each transaction, smoothening automation.
- International compliance: Offers both the ability to collect international payments with its currency conversion module and the confidence that you are staying compliant with local mandates with the Global Tax Calculator.
Cons of Cybersource
- Large business focus: Though Cybersource offers a quite complete payment fraud prevention package, their focus is on businesses moving towards international diversification and omnichannel models, which smaller businesses will find untenable.
- No real-time data: Because the software leverages Visa’s truly massive yet historic database of ID and transaction data, there is always a chance some of the data could be stale.
- Because Cybersource does not currently publish its pricing online, you’ll have to contact the sales team for a quote.
Choose Cybersource If:
- You’re looking to streamline or diversify your payment models and scale up.
FraudHunt – Affordable Security for Emerging Markets
FraudHunt was founded with the goal of providing emerging markets with a lightweight and affordable fraud prevention option. To achieve this, the founding team of data analysts and developers took proven methods and developed a platform that provides a dynamic security solution for ecommerce marketplaces of all sizes and verticals – including notable customers Crediexpress and DataBrain.
FraudHunt’s risk prevention solution revolves around scoring incoming traffic based on risk points in their device and browser fingerprint. Each user gets assigned a score based on whether or not they flip certain triggers, such as proxy detection and identifying data from operating systems, browser information, and their behavioral patterns inside the marketplace.
The software develops a real-time score based on lookups performed during the customer journey, then assigns each a score to segment the traffic into quality, low-risk, or potentially fraudulent customers.
Pros of FraudHunt
- Competitive pricing: As the company focuses heavily on emerging markets, both the integration process and monthly premiums are relatively low, and the company also offers specialized packets for extenuating financial circumstances.
- Fingerprint ID module: FraudHunt’s flagship product leans heavily into bot detection to prevent ATOs, credential stuffing attacks, affiliate scams, and content fraud.
- Accessibility: The main software offers Google Analytics integration capabilities and an intuitive reporting tool.
Cons of FraudHunt
- Specific focus: As FraudHunt wants to prevent ad and affiliate fraud by mitigating bots through device fingerprinting, companies whose commerce extends beyond these points will likely need more software on their stack.
- Not optimal for scaled businesses: In FraudHunt’s effort to be an affordable fraud solution for emerging markets, its product offers less of the automation that an enterprise-level business would require, and less advanced lookups for AML/PSD2 compliance. Even medium-sized companies will likely need another product to complement their security.
- FraudHunt offers a range of pricing structures, starting at as little as $25 per month for the Bronze package to up to $2500 per month for up to 10 million unique users.
Choose FraudHunt If:
- You’re in an emerging market looking for a cost-effective but efficient solution.
Accertify – Dynamic Automation to Suit Your Preference
The American Express company’s fraud prevention solution is Accertify, which touts itself a true end-to-end fraud solution provider, from customer authentication to SCA optimization, and even chargeback management for those inevitable occurrences.
Having processed its first transaction more than 15 years ago, Accertify is one of the prevention solutions with the most legacy available today. Indeed, many of its customers were originally brick-and-mortar merchants that made ecommerce offerings available later in their histories and chose to turn to a known credit provider for its stability.
Accertify’s main fraud detection mobile is called Accertify Digital Identity. To develop insights, the machine learning algorithms reference databases of community user behavior analytics and device intelligence to decide how to label each user. This is coupled with chargeback and reputational data from across the massive network of ecommerce partners – which also inform Accertify’s day-one strategies so that results can be seen as soon after integration as possible.
Notable Accertify customers include SouthWest Airlines, StubHub! and Urban Outfitters.
Pros of Accertify
- Dynamic automation: Accertify’s automated scoring system can be adjusted to include more or less manual review, depending on the customer’s risk appetite.
- Huge databases: As an Amex subsidiary, Accertify draws data points like IP reputation data from a huge network of legacy ecommerce providers.
- End-to-end capability: Accertify’s main offering includes modules like chargeback management and an international entire payment gateway, with additional compliance modules available, so interested companies can potentially ingest the entire infrastructure.
Cons of Accertify
- No social media enrichment: As the company is supremely confident (understandably) in the scope of its databases, it does not look into alternative or real-time data such as digital footprints, which can lead to less conclusive reports.
- Enterprise-level focus: Smaller businesses will find the price point high, as the vendor is focused on legacy companies.
- Contact the sales team for a quote and demo.
Choose Accertify If:
- You are an enterprise and appreciate access to huge databases.
SEON’s fraud APIs are highly configurable for various business use cases to match your needs, with machine learning, unique digital footprint analysis and granular reporting.
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How to Choose Fraud Detection Software
As fraud shows no signs of slowing down, you now have access to more risk management tools than ever before. The problem: it can be hard to evaluate, test, and choose the best one based on your fraud challenges.
We hope this comparison will provide a good primer on the topic and that you’ll soon get started on your road towards a safer, healthier online business.
– Monitor: Fraud detection tools will allow you to capture data about users. For example, an IP address or the kind of device they use.
– Investigate: You also need to be able to learn more about users based on the data you have. This is where data enrichment can help, to complete the picture about the users.
– Block: Most fraud detection software will allow you to automatically allow or block certain actions based on risk rules.
Because there’s been such a boom in the market for fraud prevention tools in recent years, it helps to consider the following six points before choosing your tool:
1. Your fraud challenge: Do you mainly need to reduce chargebacks? Or also to verify identities and authentication at login?
2. Integration type: Most modern tools work as SaaS via API calls, but you might want to consider on-site integration or even software that works via browser extension.
3. Preset rules vs customizable systems: Some companies need simple solutions that work out-of-the-box. Others need more control over the risk rules (to determine how risky an action is).
4. The pricing model: Most legacy fraud detection software locks you into multi-year contracts, and you’re not allowed to test it until you buy it.
5. False positives: If your fraud detection software is too stringent, you might find yourself losing business from legitimate customers. The incentive is particularly strong when your vendor promises to pay chargeback fees.
6. Bundled tools vs pick and choose: While most vendors will split their products into different offers, make sure you only purchase the tools you really need. This is easier to do with modular fraud prevention tools.
Today, all businesses are at risk from fraud, no matter their sector. In fact, the current fraud landscape demonstrates that those companies and decision-makers who think they couldn’t be affected are more likely to be targeted – exactly because they are less likely to invest in their defenses.
- Markets and Markets: Fraud Detection and Prevention Market worth $65.8 billion by 2026
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Bence Jendruszák is the Chief Operating Officer and co-founder of SEON. Thanks to his leadership, the company received the biggest Series A in Hungarian history in 2021. Bence is passionate about cybersecurity and its overlap with business success. You can find him leading webinars with industry leaders on topics such as iGaming fraud, identity proofing or machine learning (when he’s not brewing questionable coffee for his colleagues).
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