Elo

Company

Elo is a major player in the Brazilian credit card market, offering consumers and merchants a competitive alternative for payment solutions. In 2011, Banco do Brasil, Bradesco and CAIXA Econômica Federal joined forces to create Elo, offering debit and credit cards. Since then, the company has continued to grow, offering financial services including credit, debit, prepaid and voucher card network processing. The company attributes its success to strategic partnerships, innovation and a focus on financial inclusion.

 

Context

Elo is a Brazilian payments technology company that offers a range of payment solutions for businesses and consumers. Founded by three banks in Brazil, Elo quickly became a popular payment method for online purchases in Brazil, which is home to one of Latin America’s largest e-commerce markets. Benefiting from pro-innovation regulations in Brazil, Elo offers more than just credit and debit cards, having expanded into new areas, such as onboarding and anti-fraud solutions, which can even be used by partners for Pix – the instant payments scheme in Brazil. With a growing market share, Elo needed a technology partner to implement a fraud prevention system that would scale with high transaction volume and incorporate the latest, highest security standards for its customers.

 

The Challenge

Elo was evolving its solutions to expand into new markets and segments. As a connector of buyers and sellers, the growing company needed to ensure a smooth customer experience with the highest levels of security. This meant enabling customers to make payments safely, securely and seamlessly using Elo products. They saw the importance of finding the right partner who could elevate their payment capabilities in a highly competitive market. The company was looking for a new solution that offered greater customization and flexibility to
manage its fraud prevention business.

For Elo, payment methods and security represent all areas connected to capture solutions, such as point-of-sale devices, e-commerce and digital payment solutions such as click-to-pay, QR code, Apple Pay and Google Pay. This includes transaction processing, authorization systems, settlement systems and anti-fraud systems.

 

The Solution

After a rigorous evaluation that considered existing solutions on the market, Elo partnered with Feedzai to implement a fraud prevention system. Elo chose Feedzai for its strategic alignment, investments in technology and the excellence of its security platform. Feedzai’s Transaction Fraud solution was tailored specifically to Elo’s use case and particularly the company’s need for a multi-tenant platform. Elo sought to migrate its issuing bank clients from its previous solution to the Feedzai platform.

Implementation Process

1. Selection and Evaluation
   Elo used a rigorous assessment process to analyze Feedzai’s capabilities. Feedzai was the best option on the market capable of meeting Elo’s needs in terms of high volume, low latency and security.
2. Integration
   Feedzai and Elo collaborated on crucial groundwork for the launch of operations. This involved migrating volumes of historical data, lists and rules, and loading them into Feedzai’s multi-tenant solution. Feedzai also helped Elo build machine learning models for each issuer integrated into the platform. Feedzai’s APIs have also been customized with specific fields for Elo’s business case.
   The overall solution was critical for the security of credit, debit and prepaid transactions, corporate products and for opening new business opportunities, such as offering a fraud prevention engine that can be used in Pix instant payments.

 

Feedzai’s Key Capabilities

• Multi-tenancy
  Feedzai was the only provider in the market that offered multi-tenancy on its platform. Elo would act as the “owner,” while Elo’s customers would be the “tenants.” The solution enabled Elo’s issuing bank clients to have more control over their fraud risk management and take quick action.
• Value Added Services
  Through multi-tenancy capabilities, Elo has become a go-to anti-fraud solutions provider for issuing banks – generating additional revenue streams through value-added services.
• Case Manager
  Native to the Feedzai platform, this feature allowed Elo issuers to create their own rules, view alerts about potentially suspicious transactions, and make
  decisions about fraud.
• API Integration
  Out-of-the-box APIs, customized for Elo’s use case, increased efficiency, allowing the organization to scale with its growing customer base.

 

Conclusion

Elo’s partnership with Feedzai has achieved a secure payments ecosystem for issuers, merchants, and consumers. Feedzai’s multi-tenant solution provided the platform for Elo to reduce fraud and loss rates, increase process agility and develop new offers for customers. The collaboration allows Elo to focus on innovation, with robust security solutions at its core.

• Significant Cost Reduction
  Elo has seen improvements in approval rates, fraud rates, false positives and negatives, as well as an increase in process agility due to the new fraud prevention system.
• Fraud Reduction
  For one of Elo’s issuers, there was a 90% reduction in fraud basis points – a metric used in Brazil to measure fraud levels – when comparing Q1 2023 to Q1 2024.
• Over 35 Banks Successfully Migrated
  As a result of the partnership with Feedzai, these banks successfully migrated from the previous solution with minimal impact on Elo customers. Today, over 100 banks are using Feedzai’s fraud prevention platform.
• Greater Value for the Customer
  The partnership has enabled Elo to explore new opportunities and deliver greater value to customers, expanding its offerings to include new payment schemes, providing a fraud prevention engine for partners operating with Pix – Brazil’s instant payment system – and carbon credit processing.
  Additionally, this robust fraud detection has given Elo a competitive edge over its competitors.