Visa Investment Helps Form3 Expand Anti-Fraud Efforts

Account-to-account (A2A) platform Form3 says Visa is a believer in its anti-fraud efforts.

To that end, the payments giant has invested in the British company to help support its expansion, focusing on preventing fraud and increasing operational efficiency in real-time payments, Form3 announced Tuesday (Sept. 12).  The amount of the investment wasn’t released.

“A2A payments continue to grow in key segments and markets and Visa and Form3’s partnership will look to offer modern cloud-native access to real-time payment infrastructures,” Jack Forestell, Visa’s chief product and strategy officer, said in a news release.

The partnership, he added, will combine Form3’s financial crime orchestration service with Visa’s deep-learning artificial intelligence and real-time risk scoring to help financial institutions’ clients manage the risk of sending and receiving real-time A2A payments.

PYMNTS looked at Form3’s own use of AI earlier this year in a conversation with Michael Mueller, the company’s chief executive.

He explained that Form3 introduced AI as part of the payment processing that scans community data to sort patterns and payment datasets. This helps assign risk scores to beneficiary accounts in flight, which can help banks determine whether to approach the payer or put a hold on the payment.

“You need to look at the beneficiary account — and where the money’s going,” Mueller told PYMNTS CEO Karen Webster.

However, that report noted that this is easier said than done. While banks can introduce friction to combat fraud, this can be difficult in an age where real-time payments are becoming more prevalent and expected.

“However, AI can be used to identify patterns and assign risk scores to beneficiary accounts, which can help reduce fraud,” that report said.

More recently, PYMNTS spoke with Steve Cook, Form3’s chief technology officer, who observed that the Platform-as-a-Service model has gotten a boost from the rise of instant payments.

He said that the United States may be in “a bit of a transformation at the moment,” as real-time payments grab headlines and the FedNow® Service makes its debut.

However, Cook noted that faster payments have been ramping up for several years in the United Kingdom and other countries. Form3 has been processing traffic on its platforms connected to instant payments for almost six years.

Faster payments, he said, “may be relatively new, but they’re not bleeding edge anymore.” The same goes for Platform-as-a-Service, where much of the technical heavy lifting of payments and new modalities is outsourced to providers like his company, which provide ease of connectivity without clients needing to replace legacy systems.