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.
Whatever the case, you’re often the one who has to pay for these crimes. You pay for chargeback fees, for a loss in customer trust, or for compliance fines.
Something has to be done, right? Enter fraud detection software.
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 credit card details. Companies can also rely on fraud detection software and tools to confirm user IDs at signup and login.
Disclaimer: Everything written about the companies mentioned in this article was gleaned from online research and user reviews. We did not manually test the tools. However, we ensured the information was correct as of September 2021. Feel free to get in touch to request an update or correction.
The Best Fraud Detection Software in 2021
SEON Sense – The Most Flexible and Transparent
While most fraud detection software is built with very specific use cases in mind, SEON Sense was designed to give you complete control over your risk management. This is reflected in the ability to add and remove modules based on your needs, but also to scale payment based on how much you use it per month.
When it comes to the tools and technology, you also get the best features around, including 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 40+ social media networks for related user info.
The integration is also flexible thanks to the REST API calls, and many businesses even use SEON as an extra layer of protection for data enrichment only (available via a Chrome plugin, amongst 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.
Pros of SEON
- Fully modular solution: pick and choose the modules that make sense based on your fraud risk, from transaction fraud to ID proofing via iGaming 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 40+ social networks including LinkedIn, Twitter, Telegram and more to get a 360 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 UX and customer experience: SEON puts the user front and centre, whether it’s thanks to a clean GUI or free ongoing support.
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.
- Scale-up stage: a relative newcomer on the fraud prevention scene, SEON doesn’t quite have the name recognition of older legacy software (yet).
Notable SEON customers:
- Patreon, Avis, KLM / Air France, Grab, Ladbrokes, Leovegas
SEON Sense pricing:
- Starts at €300.00 per month
Signifyd – Built By Former PayPal Employees
As the title says, you’ll be in good 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 Optimisation.
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.
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, amongst others.
- PSD2 compliant: the Payments Optimisation 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.
Notable Signifyd customers:
- Samsung, eBay, Illy, Birkenstock
- N/A. You’ll need to speak to a sales team to get an idea.
Learn more about how Signifyd compares to SEON here.
Riskified – Big Data and AI
Launched in 2013 with a focus on eCommerce, Riskified soon developed its fraud prevention software to cover many more industries. It’s certainly a success story, as the company is now headquartered in New York and Tel Aviv, and recently filed for an IPO.
As far as products go, Riskified offers Policy Protect, designed to curb bonus and promo abuse; Account Secure, for account takeover protection; and Deco, which leverages big data to determine if a transaction is likely to be fraudulent.
The AI part is blackbox, meaning you won’t get full insights into how it works, but it does obviate the need for manual work when optimising for conversion versus chargeback rates.
Pros of Riskified
- Strong eCommerce focus: if you’re a Tier 1, high-transaction volume online store, Riskified seems like a safe bet.
- Pick and choose tools based on your challenges: you can purchase prevention for account takeover, bonus abuse and chargeback protection separately.
- AI and Big Data: Riskified has access to masses of data acquired from their merchant network.
Cons of Riskified
- Chargeback guarantee model: it may sound like a plus, but a chargeback guarantee model is actually a strong incentive to be overprotective with payments, which leads to high rates of false positives.
- No data enrichment: you’re at the mercy of the data they previously acquired from other merchants. That means information can become stale or obsolete.
- No reverse social media lookup: another lacking data enrichment solution – you won’t be able to find out social info about users with Riskified.
Notable Riskified customers:
- Wish, Prada, Ticketmaster
- N/A. A call with their sales team should get you a better idea of the price.
You can read a review of SEON Vs Riskified here.
Sift – One of the Fastest Growing Anti-Risk Vendor
Launched in 2011, Sift is now a $1B company, funded in part by startup accelerator YCombinator. They offer fraud protection for a whooping 34,000 sites and apps, including world-renowned names such as Airbnb and McDonalds.
Their key products include a Digital Trust and Safety Suite, which combines all their individual API tools into one complete solution. Then, there is a module specifically designed to authenticate users and to avoid ATO attacks (account takeover), 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 analyses payment information in real-time and uses machine learning to develop new risk rules.
Finally, you can also purchase their Dispute Management module, which is specifically designed to help monitor log as much data as possible when going through a chargeback resolution process.
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 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.
Notable Sift customers:
- Airbnb, McDonald’s, Doordash
- Available upon request to the sales team.
Ravelin – Blackbox AI and Graph Visualizations
Founded in 2014 in the UK, Ravelin is the brainchild of former senior executives from real-time mobile payment and the ridesharing app Hailo. Since its inception, it has blocked 4 million fraudulent transactions, saving its customers $17B worth of bad orders.
Reavelin’s anti-fraud tools include a blackbox machine learning AI, which sifts through a shared network of vendor data to deliver tailored risk rules. You can also customize the rulesets manually.
One of the company’s unique selling points is Ravelin Connect, which allows you to visualize fraud risk with graph network capabilities. The product is available as an API.
For payment verification, you get 3DS2 authentication and approval from global payments such as EMVCo and Visa.
Pros of Ravelin
- Strong data science: you may not have much control over the Blackbox AI, but it was built by expert data scientists.
- Large database: Ravelin works with huge, high-turnover companies, giving its database plenty of transaction info to build rules from.
- Graph visualization: good for mapping connections in a large database, especially when it comes to fraud rings and multi accounting users.
Cons of Ravelin
- Enterprise only: the integration cost and multi-year contracts only really make Ravelin suitable for the biggest companies.
- Pricing model: multi-year contracts, no free trial, and integration costs extra.
- No social media checks: yet another enterprise-grade fraud prevention tool that won’t look at social networks for extra info.
Notable Ravelin customers:
- Booking.com, Just Eat, Deliveroo
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 9000 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, amongst others. They offer everything you need for CNP (card not present) 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 their 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.
- Automated and customisable rules: tailor rules to automate chargeback prevention or reduce manual review time, amongst others.
Cons of Kount
- Limited Machine Learning capabilities: despite custom rule creation capabilities, the machine learning features are not up to par with some newer solutions on the market.
- 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.
Notable Kount customers:
- Barclays, Chase, Staples, PetSmart
- Available after sales call
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 Emailage specialises in so you can get a customer profile with an associated risk score based on an email address only.
Emailage’s technology is now incorporated into LexisNexis, a huge cybersecurity and risk management corporation, which helped it access 4 Billions email user data and 5.9 Billion digital identifiers worldwide.
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 their 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.
Notable Emailage customers:
- While Emailage claims to have customers in a variety of industries including fintech, online gaming, OTA and ecommerce, amongst others, their official clients don’t appear on the website.
- Available after contacting the sales team.
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, who’s databases, webmail hosts, service providers and more. They 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: their 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 less 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 a fully fledged anti-fraud software.
- Only 7+ social network checks: fine for the most common markets, but lacking in emerging economies.
Notable ArkOwl customers:
- Not available to public.
- Not available. You do get a free trial, though.
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 a handful of 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, length contracts: we don’t have a clear figure, but some online reviews mention the need for a large budget to integrate Ekata.
Notable Ekata customers:
- Lyft, Equifax, Microsoft.
- Enterprise-level contracts at an undisclosed price on the website. Speak to their sales team for more info.
Iovation – AkA TransUnion or TruValidate
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 de facto 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 customisable authentication solution, document verification (via their proprietary database) and biometric verification.
Pros of Iovation:
- 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 a seamless integration between all TransUnion’s services.
- iGaming expertise: Iovation is the most famous fraud detection software in the online gaming world.
Cons of Iovation:
- Stale data: a massive database is useful, but sometimes having less, fresher data 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 Iovation.
Notable Iovation customers:
- Kaidee, Playcherry, GoCompare,com.
- Available upon request.
The Best Fraud Detection Software And Tools – Key Takeaways
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.
Source in this article: Fraud Detection and Prevention Market by Solution (Fraud Analytics, Authentication, and GRC), Service (Managed and Professional), Vertical (BFSI, Retail and eCommerce, and Travel and Transportation), Deployment Mode, and Region – Global Forecast to 2025
Frequently asked questions about Fraud Detection Software
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 6 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 customisable 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. Read more about the chargeback guarantee model vs micro fees here.
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. Easier to do with modular fraud prevention tools.
We’ve compiled all the information you need to know in a handy online guide, also available as a downloadable ebook
See a live demo of our product
Bence is the co-founder and COO of SEON whose vision is to create a safer online environment for merchants in high risk verticals.