Trustev looks to deliver with online anti-fraud software at Techcrunch Disrupt NY 2013

An Irish tech company, co-founded by serial entrepreneur Pat Phelan, was this week selected as one of 30 global finalists at Techcrunch Disrupt NY 2013.

Trustev, a technology start-up headquartered in Cork, with offices at Telefónica's Wayra technology accelerator hub in Dublin, was selected from thousands of contestants to compete on the Start-up Battlefield stage at Techcrunch Disrupt.

The event, which gives start-ups the opportunity to launch themselves live on stage to an audience of media, venture capitalists, angels and other investors in the technology industry.

Techcrunch Disrupt NY 2013 is hosted by TechCrunch, described as "a leading technology media property, dedicated to obsessively profiling start-ups, reviewing new internet products, and breaking tech news". Previous winners include Dropbox, Yammer and Mint.com.

The winner gets $50,000, the coveted Disrupt Cup and maximum exposure to the most interested of parties on the global tech stage.

Four of the Trustev team took part in the Start-up Battlefield over three days.

The company, founded by Phelan and Chris Kennedy, has developed a new way to use "social fingerprinting" to ensure that online merchants can be certain they are dealing with real human beings and that the person making a credit card purchase online is who he or she is supposed to be, thus reducing fraud, which costs online retailers an estimated $20 billion annually.

Incredible as it seems, Trustev is the first company to establish a unique coding system that uses social networks to establish that someone making a payment online is a real person by combining information from sites such as Facebook with traditional banking checks.

Their system allows an online merchant to verify that a transaction is not being made by a bot or human fraudster by running a social media background check, thus avoiding costly manual credit card verifications and expensive fines for fraudulent transactions.

Trustev’s chief media officer DC Cahalane explains that theirs is a system primarily geared to the online seller. From the retailer’s perspective, 27 per cent of all online payments must be reviewed manually, a situation which costs 200 million employee days every year, despite the fact that 75 per cent of those orders are subsequently approved.

It is estimated that $18 billion a year is lost through shopping cart abandonment.

We’ve all been there: frustrated by the slew of questions, details and passwords required of us when making a purchase online.

Cahalane says that one-in-three shoppers will change where they shop based on perceived antifraud heavy-handedness by the retailer at the checkout.

On the flipside, it costs an online merchant $2.70 for every dollar spent in a fraudulent transaction. Not only has the merchant lost the goods they have sold, but they have to refund the bank and pay charges.

As Phelan says: “You can bar up the front door of your shop and no one will come in,” or you can implement Trustev.

Personal data
The idea of someone using your Facebook profile to identify you when shopping online may have a Big Brother feel to it, but Cahalane is keen to point out that the Trustev system does not identify the purchaser as an individual with a knowable identity, but rather as a series of numbers. It can verify that the shopper is a real person, through the patterns created in a Facebook account.

Trustev does not access personal data, such as photos or postings, but looks at the frequency and regularity of usage – the irregular actions on the account which point to it being a person rather than a machine that is generating the data.

Phelan says the Trustev has a knock-on effect for the consumer, particularly those who want to use smartphones or tablets to make online purchases.

By logging in with Trustev, the cart at the final transaction will already be prepopulated with the person’s details from Facebook (and later in the year from Weibo, one of the most popular social networking sites in China) eliminating the headache of inputting long passwords or personal details when shopping online.

It's the second time that Phelan has been on stage fighting for glory as a finalist at Techcrunch Disrupt. He was there some years ago with his other start-up, Cubic Telecom, a mobile roaming service.

Trustev has to date raised $300,000 in seed funding and is in its second round of fundraising. Investors so far include Dylan Collins, chief executive at Jolt Online, Eamon Leonard and David Collier, the co-founders of Orchestra which was sold to Engine Yard in 2011, and renowned celebrity photographer Kevin Abosch.

“Techcrunch Disrupt is like turbo-charging your company. To be recognised by TechCrunch to be one of the hottest 30 tech start-ups on the planet is an honour,” says the entrepreneur and mentor, who says that having the right team around him is essential to business success.

Reducing fraud
"To be on the stage twice with two different start-ups, that kind of stuff doesn't normally happen to ex-alcoholic chef/butchers," he says.

While Trustev is about reducing fraud for online merchants, it is also, says Phelan, ultimately about altering how the internet works. “People concentrate on inventing more stuff instead of making what’s already there more beautiful,” he says. “Our initial goal is to sort out fraud but our ultimate goal is to change how people use the internet.”