When foes become friends: Capital One partners with fintech giants Stripe, Adyen to prevent fraud
The tension between incumbents and fintechs has existed for decades. But every once in a while, the two groups decide to put their competition aside and work together.
In an unusual move, Capital One is teaming up with payment giants (and rivals) Stripe and Amsterdam-based Adyen to offer a free product aimed at fraud reduction, the financial services giant told TechCrunch in an exclusive interview.
While Capital One has built models to protect its customers from fraud, it was getting stuck because it just “didn’t have enough data,” said head of fraud strategy Jon Borman.
So it built an open source project called Direct Data Share, which Borman said is an API that allows merchants or anyone in the payment stack to send real-time transaction data. This is particularly useful for e-commerce transactions, which he described as “pretty unsafe” compared to in-person purchases where a user is verifying the chip on a credit card, for example.
With Direct Data Share, every time an online purchase was made, “a bunch of data” flowed through Capital One’s API to the bank, which would be used to help prevent fraud for more customers and merchants, he said.
