Capital One has forged an unusual alliance with payment giants, Stripe and Adyen, to launch Direct Data Share, a free product aimed at reducing e-commerce fraud. Despite Capital One’s robust fraud protection models, the financial services giant faced limitations due to insufficient data, according to Jon Borman, head of fraud strategy. Direct Data Share, an open-source API, facilitates real-time transaction data sharing among merchants and payment processors, enhancing fraud prevention efforts. By collaborating with Stripe and Adyen, Capital One leverages a vast data pool to identify fraudulent activities across different platforms, thereby acting as a data clearinghouse. E-commerce fraud is expected to total $343 billion globally by 2027, making this a well-timed partnership for the e-commerce landscape.
The collaboration benefits merchants by increasing fraud detection rates and reducing false declines. Since the beginning of 2023, Capital One has been using fraud scores from Stripe's Radar product to increase the accuracy of transaction authorization, and the recent inclusion of Adyen has further strengthened this initiative. This strategic cooperation underscores a shared commitment to combating criminal activity and ensuring secure transactions in the digital economy.
