Consumer credit reporting agency TransUnion has been named as the primary data provider for Payfone, which provides mobile and digital identity authentication solutions to top U.S. financial institutions. The partnership will enable Payfone to use TransUnion’s algorithms to strengthen the accuracy of its fraud detection capabilities.
“Payfone has seen great value in leveraging TransUnion’s data resources and incorporating more of [TransUnion’s] data into our existing solutions,” Payfone CEO Rodger Desai said in a statement.
Glen Goldstein, senior vice president of diversified market at TransUnion, explained that since financial startups and banks underwrite customers online and not in person, verifying phone data serves an important role in fraud verification.
“Fewer people are walking into a branch to establish a loan. Much more of it is done remotely; oftentimes, it’s done on a mobile phone,” he said. “Underwriting, fraud verification and prevention are very different when it’s not a face to face, so the demand for identity management and fraud products — like IDVision with Payfone’s solutions underneath it — has really become hugely popular.”
Though Goldstein could not confirm which customers will benefit from the partnership, he said that Payfone and TransUnion are leaders in the field, and that TransUnion works with several top U.S. banks. While Payfone did not say which institutions are its customers, it reportedly works with six of the Top 10 U.S. financial institutions and offers identity–authentication solutions for peer-to-peer payments solution Zelle.
Goldstein noted that Payfone and TransUnion have been buying data from each other for a few years, and the new partnership will allow Payfone to seamlessly connect to TransUnion data, allowing for safer transactions.
“The [new partnership] is mainly around expanding our contribution to Payfone, in terms of our public records data, to become their primary supplier,” he said “So when they’re matching phone numbers and people, and they’re checking it against identities, Payfone is now going to be primarily using TransUnion for that.”
Under the arrangement, Payfone will make use of two of TransUnion’s tools. TransUnion’s IDVision tool allows the company to match a customer’s identifying information — such as name, address or phone number — to their online banking data. And its iovation tool offers digital identity verification tied to a phone a customer is using. Payfone leverages its relationships with major phone carriers along with TransUnion’s data to verify the identity of a smartphone user who wants to open a bank account.
“They have a real–time view that can say ‘this device that you’re seeing, it is connected and not with a fraudster — or it isn’t a phone that’s been disconnected.’” Goldstein said. “When you put [TransUnion’s] data assets together with Payfone’s assets, we feel like we have a stronger weaponry of data to fight fraud.”
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