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CyberSource Preserves Resources and Achieves High Levels of Accuracy

  • July 01 2002, 1:00am EDT
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REVIEWER: Jeff King, director of risk product management for CyberSource Corporation.

BACKGROUND: CyberSource Corporation is a leading provider of risk management and electronic payment solutions for enterprise businesses selling via multiple sales channels. Headquartered in Mountain View, California, CyberSource solutions manage transaction risk and enable electronic payment processing for Web, call center/IVR and POS environments. More than 3,000 businesses use CyberSource solutions, including CompUSA, Nike, Guess?, Compaq and more than half of the Dow Jones Industrial companies.

PLATFORMS: HotData runs on a Java client to access Group 1's HotData servers.

PROBLEM SOLVED: For two years, CyberSource developed and maintained the address verification and standardization function of its advanced fraud detection system by directly purchasing Canadian and U.S. data and writing matching algorithms. However, CyberSource found that the overall match rate rarely met or exceeded its high standards of accuracy and consumed multiple engineering, quality assurance and documentation staff resources. As North American companies continue to conduct more business internationally and vice versa, and as fraud continues to threaten their business, the ability to efficiently offer accurate international address verification and standardization as a value-added service and a key feature of its advanced fraud detection system became increasingly important. To preserve resources and achieve higher levels of accuracy, CyberSource turned to Group 1 and its HotData service.

PRODUCT FUNCTIONALITY: The Group 1 HotData system, which supports address data quality for more than 220 countries and dependencies worldwide, provides important address verification and standardization functionality for the CyberSource advanced fraud detection system. Address verification is one of more than 150 variables used to assess risk in our fraud screening system, along with items such as IP address and phone number validation. Additionally, standardizing addresses is equally important to ensure that individuals are not using multiple, slightly modified identities to ship goods and services to the same address. For example, if a merchant knows that an individual at an address has defrauded them, standardizing this data helps prevent them from shipping additional merchandise to this address again, even if the fraudster makes small changes to the address that might not be detected by simple address checks. We are pleased with the performance of Group 1's HotData service. Each month we process thousands of fraud screen transactions in real time for more than 500 customers. The hosted service from HotData provides exceptional address matching and standardization allowing us to deliver more accurate risk prediction scores and value to our customers while minimizing consumption of our valuable internal resources.

STRENGTHS: HotData provides extremely accurate and comprehensive address validation and standardization results, with a match rate in excess of 99 percent for domestic address records. By leveraging Group 1's HotData service, CyberSource can offer its customers highly accurate address data verification and standardization services, which can help them more accurately deliver goods and services on time to their own customers. Group 1 has also demonstrated an excellent service record illustrating the company's commitment to system availability and reliability.

WEAKNESSES: HotData's international engine differs from the U.S. and Canadian address verification engines. This lack of consistency with these engines has posed a bit of a challenge.

SELECTION CRITERIA: CyberSource selected Group 1 over two competing companies because HotData's match performance was excellent and Group 1 provided a hosted solution that allowed CyberSource to quickly integrate the address verification functionality without exhausting IT and operations resources to install local software and manage database updates. CyberSource was also attracted to the modular design of Group 1's HotData service, which allowed the company to execute a geographically phased rollout of the functionality.

DELIVERABLES: In real time, HotData provides valid, standardized address data for more than 220 countries and dependencies worldwide.

VENDOR SUPPORT: Group 1 has provided excellent support of HotData, especially as we have completed the international HotData API implementations.

DOCUMENTATION: The documentation is straightforward and easy to follow. We could easily run HotData relying only on the supporting materials.

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