Bitcan.pl, a Polish crypto exchange owned by Litpay group, has started a cooperation with Nethone, an expert in the online payments protection and account takeover prevention for online customers. Now they announce the results of the cooperation.
The leader of pay-by-link transactions among crypto exchanges focuses on security
Bitcan.pl allows for instant Bitcoin purchase and sales. As the sole Bitcoin exchange in Poland, it allows for transactions of up to PLN 50,000 (~ EUR 12,000). Despite the fact that the most popular payment method in the world is still credit cards, in Poland the most frequently chosen form is the so-called pay by link. Unfortunately, the simplicity and convenience of pay by link does not always go hand in hand with security. Therefore, the biggest challenge Bitcan faced was increasing the security of transactions, especially in this area of payments.
The current AML procedures imposed on entities from the financial industry by regulators unfortunately do not keep up with the creativity of fraudsters. Basic user verification, i.e., sending pictures of IDs and a photo of a face, is insufficient in Bitcan’s experience. Therefore, as the first bitcoin exchange in Poland, it extended the verification process to include video calls.
Another popular Litpay product, BitcoinWidget.pl, enables bloggers and website owners to monetize their website traffic. BitcoinWidget offers its users low-value, anonymised bitcoin transactions. Development of this product was the basis for the decision to implement new tools to effectively detect fraud attempts.
Among the solutions implemented by the Litpay group to increase customer security is the “Restricted Documents” system launched by the Polish Bank Association. In December 2020, integration with the Ognivo interbank system from KIR will be completed, enabling smooth communication between banking and obligated institutions.
Multi-layered fraud prevention
Nethone secures payment transactions and prevents account takeover (ATO). The company has developed a proprietary Know Your Users (KYU) model that allows understanding of the users of cryptocurrency wallets and exchanges, proactively preventing unauthorized transaction attempts. Nethone protects the bottom line of online businesses and, most importantly, the assets and security of clients’ customers.
Thanks to the use of Artificial Intelligence and Machine Learning in its proprietary decision engine, Nethone enriches the context of customer understanding with over 5,000 attributes in three areas: user behavior, parameters of their equipment (so-called digital fingerprint) and network connection features. This data is extracted completely in the background and does not require any additional actions from the user. The correlations of attributes are analysed in real time, and the result of this process are immediate recommendations. As a result, Nethone helps to reduce the number of rejected transactions, reduce the cost of manual reviews and the risk of fraud, without negatively affecting UX (user experience).
Founded in 2016 by data analysts, security experts and managers, Nethone is one of the fastest growing technology companies in the CEE region, primarily serving the digital goods, financial and e-commerce industries. The company also hosts Crypto Talks by Nethone, a non-commercial series about crypto trends and news from this ecosystem.
Cooperation with Nethone
After many months of searching, Bitcan managed to find a partner who, with its flexible offer, adapted to the needs of the currency exchange and increased the security of its customers. From the very beginning of the cooperation, both companies worked closely together monitoring the traffic and transaction specifically to train the models and add new functionality. In just over 2 months, Nethone managed to significantly reduce the level of blocked traffic from 60% to 25%.
The cooperation has also resulted in a 96% reduction in the number of unauthorized transactions, thus protecting several thousand currency exchange users from losing funds with a total value of over PLN 3 million (~ EUR 750k). By actively following online fraudulent methods and reacting immediately to new “trends”, Bitcan also secured funds worth nearly half a million PLN (~ EUR125k).
In addition, Nethone and Bitcan are launching a joint project of a shared fraud database, the purpose of which will be to collect information about suspicious transactions. The base operating as part of the Nethone platform will bring together entities from the cryptocurrency industry that want to improve the security of their services. This solution will enable the development of even more effective risk analysis models and will block fraudulent attempts in all partner websites and apps.
“I was very enthusiastic that some of the Polish banks, soon after Bitcan, also started implementing the solutions offered by Nethone. This means that the banking and payments market is maturing and adapting to the technological realities of today’s world. However, I miss joint actions to protect customers, which is why, while representing Litpay Group, I will actively persuade all entities to take advantage of the fingerprint analysis.
The purpose of the cooperation with Nethone was to build internal solutions for our group, I believe that they will be the beginning of unified standards for the entire market. Therefore, I would like to share our extensive database of analysis, so the new entities do not have to go through the tedious process of building the foundations of customer protection. I also hope that these entities will share information with us, thanks to which we will create models that increase the security of the entire industry. The cryptocurrency market is still in the early adopters’ phase and if we want to move to the early majority phase, when it comes to security we must be partners, not competitors.” – said Piotr Bień, Head of Operations at Bitcan.
“Nethone is constantly developing and improving its technology. Thanks to this, we can provide services at the highest level to financial institutions and entities from related industries, which are subject to high regulatory requirements. The cryptocurrency segment, even though still relatively young, is developing rapidly, attracting an increasing number of consumers. We are glad that Bitcan is one of the companies that actively look for innovative solutions in the interests of their customers.
We look to the future with optimism and will work together to pave the way for other cryptocurrency entities. I believe that thanks to this, the pace of blockchain technology adoption in Poland will accelerate even more.” – added Hubert Rachwalski, Chief Executive Officer at Nethone.
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