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American Express' Unit to Control Rise in Digital Fraud

American Express Company’s AXP unit, Accertify, recently rolled out an API-based solution, which can be used by organizations to counter the alarming rise of digital identity fraud. It is worth mentioning, Accertify has been providing real-time insights for 12 years, which has helped several organizations in safeguarding their business and customers by estimating future fraud trends.

The solution – Accertify Digital Identity – has been equipped with machine learning, advanced behavioral analytics and device intelligence technology for calculating a trust score, following which it even assigns related reason codes for recent real-time account activity.

Apart from analysing trusted attributes for organizations, Accertify’s new solution also keeps continuous check on its customer accounts and detects any sort of unusual activity including successive account updates and automated bot attacks.

Moreover, we believe the launch of Accertify Digital Identity is well-timed, given the urgent need for fraud prevention solutions due to spike in fraudulent account openings and account takeovers. While fraudulent account openings refer to creating an account with fake information, account takeovers has been described as access to accounts without approval.

It has to be mentioned here that account takeovers, described as an identity theft, have accounted for the highest loss rate among fraud losses in 2019, according to the 2020 Identity Fraud Report released by Javelin Strategy & Research in May this year.

Notably, there has been a substantial reduction in the number of vehicles plying on roads due to the COVID-19 pandemic. This can possibly create increased incidence of account takeovers as customers may not frequently check loyalty points, rewards and mile accounts as they used to do before the pandemic.

Also, the current social-distancing measures in a bid to curb COVID-19 have led to a need-based demand for digital payments. With a surge in digital transactions, Accertify’s fraud and chargeback management products backed by this new solution definitely bode well for customers.

Shares of American Express have lost 24.2% in a year compared with the industry’s decline of 18%. It carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Furthermore, American Express has been making every effort to enhance its digital solutions suite for assisting businesses in regulating payments. This week itself, the company launched its proprietary automated accounts payable (AP) solution, American Express One AP. Need for securing payment processes via digitalization and making the same an essential component of customers’ business has been driving demand for automated AP solutions. Automating the accounts payable process with innovative, end-to-end solution enables businesses to pay easily for requirements, thereby simplifying operations. This, in turn, fuels growth.

Last week, American Express has undergone two digital integrations with SAP Concur Solutions, which will lead to automation of the invoice and expense management processes in businesses. In the same week itself, American Express along with leading companies such as Discover Financial Services DFS, Mastercard Incorporated MA and Visa Inc. V have made efforts to expand the Click-to-Pay online checkout, based on the EMV Secure Remote Commerce industry standard. Click to Pay, which the aforementioned companies announced in the United States during October 2019, is a digital checkout solution that provides enhanced checkout experience to consumers.

We believe these initiatives bode well for the company as people are now relying more on digital payments for most day-to-day activities.

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