Forter, an Israeli-based startup that has developed a one-of-a-kind fraud solution for e-commerce merchants, has raised $3 million in Series A funding from Sequoia Capital.
The company was founded by executives from Fraud Sciences, a company that delivered fraud decisions manually with coverage protection. Fraud Sciences was acquired by – and integrated into – PayPal in 2008 for $169 million. Forter, which developed its technology in Citigroup’s fintech accelerator program in Tel Aviv, says it has found a way to automate Fraud Science’s proven process of leveraging profile data, behavioral data and cyber intelligence into the e-commerce experience so all merchants can benefit from the technology.
Forter’s technology is fully automated, which means it approves and denies transactions in real-time). The company also fully backs its transactions with a 100 percent chargeback protection program. Currently, most of the companies that are backing transactions, aside from Forter, are companies that are manually reviewing them.
As Forter’s co-founders Michael Reitblat and Liron Damri explain, most payment processors don’t take responsibility for fraud. When you pay for an item online, every time a buyer submits a transaction, flags will turn that review the transaction, and will remove it for manual and further review. From this, some transactions will be approved and some will be declined.
Forter claims to eliminate all of this. While other solutions are solely focusing on verifying customer-given information, which is easy to fake, Forter focuses on combining that with the actual behavior of a legitimate customer – something that is much harder to fake. The technology sits between the payments gateway and the merchant and will give you a yes or no answer of fraud detection within 300 milliseconds. In the rare case that there is a mistake, Reitblat and Damri, say that Forter will take on the cost of the transaction.
While the company is not releasing too many details on the proprietary technology, we’re told that Forter takes into account web behavior, identity intelligence, and behavior analytics to determine fraud online.
The founders are confident that Forter offers the best anti-fraud technology for e-commerce merchants. It’s a big claim, but e-commerce fraud is a real problem, and more powerful technologies that protect both the merchant and consumer is a good thing.