A patent for a first-of-its-kind technology thwarting SIM swap scams, one of the fastest-growing types of fraud plaguing consumers, has been awarded.
Mobile identity authentication for digital channels specialist Payfone, landed the patent wherein the API-based solution detects and prevents SIM swap fraud by leveraging the company’s unique partnerships with the U.S.’s largest mobile network operators.
As the rate at which consumers engage with their banks, healthcare providers and retailers via mobile continues to grow, so does the sophistication of fraudsters and the tools at their disposal. SIM swap fraud is a dangerous new threat that has been robbing victims of their hard-earned savings and costing banks and other financial institutions billions of dollars.
Payfone’s technology makes it impossible for hackers to complete these types of attacks. The API-based solution can immediately detect when a SIM card has been swapped and can notify the customer’s bank when this, or other high-risk/out-of-the-ordinary events occur.
Because Payfone communicates in real-time with mobile network operators, it has the ability to know at any moment in time whether or not a SIM card has been swapped. Without Payfone, banks are flying blind—there is no way to detect when a customer’s SIM has been changed.
SIM swap scams typically involve fraudsters impersonating customers in order to persuade customer service representatives to transfer the customer’s phone number to a new SIM card in the scammers’ possession. Once they have control of the customer’s phone number, the hackers then use it as a credential to take over the victim’s bank accounts.
While security is at the core of Payfone’s identity authentication tech, faster and more effortless user experiences are an additional benefit of the company’s behind-the-scenes authentication processes.
Nine years ago, Payfone made a contrarian bet against more traditional digital security methods focused on blocking “bad actors”, instead focusing on a new approach that enables “good actors.” Until Payfone stepped in, the only options to prevent fraud involved ratcheting up security, having a massive call center to manage fraud, or purchasing dozens of tools designed to block fraudsters. These approaches aren’t only unsuccessful in terms of fighting hackers, they’re also detrimental to the user experience, which in turn eats away at businesses’ bottom lines.
Payfone takes a new approach based on positive rules; positive behavior and profiling good customers. As a result, Payfone processes over 10,000,000 transactions a day for the largest financial, healthcare and governmental organizations and is set to reach 50,000,000 transactions per day by year-end, enabling its clients to provide safer, faster and easier user experiences for their customers.
The company’s proprietary platform processes millions of signals a day to authenticate and score transactions with unrivaled speed, safety and accuracy. Payfone’s investors include RRE Ventures, Opus Capital, Relay Ventures, Early Warning Services, American Express Ventures, Verizon Ventures, Rogers Venture Partners, BlueCross BlueShield Venture Partners, Andrew Prozes, Strauss Zelnick, Maclab Development Group and Transaction Network Services. Business Insider Intelligence recently highlighted Payfone’s recent round of funding as one of the 10 largest US VC-backed fin-tech deals of Q1 2017.