Tender Armor a global fraud prevention payments technology provider, today announced the closing of a multi-million-dollar Series A investment led by private investors Aubrey Strul and Barry Beck, with additional funding through Strul Logistics and Technology LLC. The Series A round enables Tender Armor to drive new business and product innovation, expand its workforce, and meet increasing demand by financial institutions for its multi-patent-pending CVV+ solution.
The CVV+ solution addresses the growing threat of card-not-present (CNP) fraud and the consumer worries it creates. Fraudulent CNP charges cause undue stress to cardholders while burdening them with repairing the damage. It also results in significant losses for financial institutions such as replacement card costs, countless lost purchase dollars, and perhaps most painful, customer attrition. CVV+ works to prevent fraud from occurring before it happens, unlike other solutions that don’t detect fraud until the transaction is being processed.
“We immediately fell in love with Tender Armor’s exceptional management and compelling, multi-patent-pending technology,” Mr. Strul and Mr. Beck said in a statement. “Tender Armor is a recognized leader in the fraud prevention payments space and is ideally positioned to stem the tide of fraudulent CNP transactions.
“We not only invest in great companies, but also have other highly experienced investors who work with companies to help make them best in class. This was an easy investment for us to make as all of the value drivers were in place.”
With the advent of EMV chip cards, fraudsters are following the path of least resistance by attacking CNP fraud, which includes purchases made online, through mobile devices and over-the-phone. CNP fraud has led to billions of dollars in losses and expenses for financial institutions and retailers, and the problem is only expected to worsen. In the U.S. alone, CNP fraud is anticipated to increase by 68 per cent from 2016 to 2018, according to U.S. Payments Forum.
According to American Express, nearly half of consumers who shop online report they have been the victim of payment fraud, representing nearly 80 million online shoppers. Fraudulent CNP transactions impact consumers by creating cardholder anxiety that negatively affects their online shopping behavior. Research conducted by Sparks Research and Tender Armor found 55 per cent of cardholders decrease online shopping, reduce payment card usage, and close payment card accounts after experiencing a fraudulent event.
The benefits of the CVV+ solution provide immeasurable value to both cardholders and bank card issuers. The solution empowers consumers by protecting against ecommerce fraud, lost and stolen cards, retailer breaches and unauthorized use of their credit, debit, and prepaid cards. For financial institutions, CVV+ helps reduce CNP charge-off losses, curtails cardholder attrition and decreased card usage, and minimizes payment card re-issues while avoiding costly reputational damage.
The easy-to-use solution works by anonymously authenticating the cardholder everywhere payment cards are accepted including through mobile devices, online, and over-the-phone by generating a security code that only the cardholder can obtain. The cardholder can choose to receive the code daily or use the solution as a one-time passcode. Cardholders can securely receive their CVV+ code via a mobile app, text-on-demand, a daily SMS message, email, or through their card issuer’s banking site. To complete the transaction, the dynamic CVV+ code is used by the cardholder in place of the static security code printed on the payment card.
“Three years ago, the market void in fraud prevention solutions was evident as it still is today. We set out to create a highly effective payment fraud prevention tool that deputizes cardholders to protect them from fraudsters,” said Madeline K. Aufseeser, CEO of Tender Armor. “This Series A investment validates our CVV+ technology, go-to-market strategy, and competitive edge in the payment card fraud prevention arena. Now, with the support of investors, Tender Armor enters the next phase of growth, expanding our product and workforce, and driving new business within the payments industry and beyond.”