The company has developed a fully automatic algorithm that can recognise whether an online payment was authentic or fraudulent, offering payment companies, and thus online sellers, an unprecedented level of security. Not only does the system detect and, with a high level of probability, prevent fraudulent transactions in the first place, it also lowers the number of valid payments that are incorrectly rejected.
Munich Re’s data analysts have tested Fraugster’s self-learning algorithm, and found that the statistical theory it applies, the quality of its transaction check, and its IT infrastructure are all fit for purpose and reliable. In addition to this “seal of approval”, the startup was also granted an insurance policy against transactions that are wrongly deemed legitimate. This is a decisive issue for Fraugster since, in addition to checking the electronic transactions, the startup offers to reimburse its clients for any payment defaults caused by fraud that goes undetected.
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