Ballerine, a US-based AI-native merchant risk and compliance platform, has launched Scam and Fraud API Detection, a solution designed to identify high-risk merchants and coordinated fraud networks before transactions occur.
The system analyses digital footprint, behavioural signals, ownership structures, and ecosystem connections to reach a risk determination in under 60 seconds, rather than relying on transaction monitoring or static onboarding checks alone.
The solution is designed to detect patterns across networks of merchants rather than assessing individual entities in isolation. It identifies clusters of related entities, discrepancies between declared and actual business activity, early signals of transaction laundering, and concealed high-risk activity embedded within otherwise legitimate storefronts, addressing the challenge of coordinated fraud groups operating across multiple identities, geographies, and payment providers simultaneously.
Fraud landscape and structural detection gap
The launch responds to a documented acceleration in the scale and sophistication of merchant fraud. Ballerine notes that scam operations previously requiring months to establish can now be built and scaled in days using AI tools, presenting as legitimate businesses while concealing coordinated high-risk activity. Research by Ballerine, based on analysis of tens of millions of merchants, published in a new book by CEO Noam Izhaki, identifies repeatable scam models including synthetic merchant identities, deceptive storefront networks, scam subscription structures, and transaction laundering operations that behave as scalable, adaptive systems rather than isolated incidents.
The company identifies a widening mismatch between how fraud now operates, automated, coordinated, and AI-powered, and how it is detected by financial institutions, many of which continue to rely on fragmented signals and delayed review processes. As commerce moves toward agentic transactions, the ability to assess merchant legitimacy instantly becomes increasingly central to establishing trust within automated payment flows.
Noam Izhaki, Co-founder and CEO of Ballerine, said the solution can determine whether a merchant is malicious in under 60 seconds and block fraudulent transactions before they occur, addressing a structural gap in risk systems built for a slower, manual environment. Cihat Fitzgerald, Chief Risk Officer at Ballerine and former Head of Ecosystem Risk at Visa, noted that coordinated fraud systems are designed to move across acquirers and geographies, creating pressure across the entire payments ecosystem.
