Spurred by an increase in online transactions due to COVID-19, Virginia-based fraud prevention platform NS8 has announced it has raised $123 million in a funding round led by Lightspeed Venture Partners, and with participation from AXA Venture Partners.
NS8 monitors user behavior factors such as how quickly they navigate between pages, how many times a specific page is loaded, and whether or not a mouse is used to try and distinguish between actual human users and ‘bots’.
With the increase in online traffic and the expansion of e-commerce that have come as a result of physical distancing and lockdown measures put into place to prevent the spread of COVID-19, the demand for fraud prevention solutions like NS8 has also grown.
According to NS8 CEO Adam Rogas, between February and April of this year the company saw a 350% increase in demand for its services.
Aside from trying to hunt down bots masquerading as real users, NS8 looks at what technology is being used and if users are using a service like Tor’s anonymizing software to mask their location.
“Most consumers do not normally try to hide their identity with Tor, which makes its use suspicious in commerce — this would negatively affect the user’s trustworthiness,” Rogas said in an interview with VentureBeat.
NS8 can integrate with a variety of third-party e-commerce platforms like Shopify, Magento and BigCommerce, and is also capable of detecting fraud on the payment gateway side of transactions as well.
To prevent businesses from discouraging legitimate customers, NS8 clients can assign a trust ‘score’ through the backend dashboard that determines whether a shopper will be asked for further identity authentication.
Rogas also warns that with the rush to provide online services for many businesses previously unprepared for the volumes they are now seeing, they tend to relax their fraud standards to process as many orders as possible.
“Orders that might typically be flagged for manual review or put through secondary verification steps are now being approved to preserve revenue in the uncertain marketplace,” said Rogas. “If other merchants adopt this same approach, there stands to be a significant increase in ‘friendly fraud.’”