Casap recently amassed $25 million in Series A funding to tackle the rampant issue of first-party fraud. In today’s financial sphere, resolving payment disputes is an intricate problem, often described as outdated and costly. As digital transactions become more mainstream, the prevalence of first-party fraud—where account holders themselves commit deceit—has surged, requiring innovative solutions to protect financial institutions.
Casap’s latest funding round was backed by Emergence Capital, marking a pivotal moment in the firm’s expansion. Historically, tools available to financial bodies have not kept pace with the sophistication of fraud tactics. Existing methods, reliant on outdated technologies, struggle to identify deceit in increasingly complex scenarios of fraud. With this financing, Casap seeks to enhance its advanced platform, replacing multi-tool systems with a unified AI-driven process.
Why Focus on First-Party Fraud?
First-party fraud has become a significant concern as it accounts for a sizable portion of financial fraud losses. Unlike third-party fraud, where external actors perpetrate crimes, first-party fraud involves customers misrepresenting themselves. These acts can include disputing valid transactions or falsifying information to secure credit under false pretenses. The challenge lies in the perpetrator being the account holder, which complicates detection and resolution.
How Does Casap’s Solution Work?
The approach Casap employs modernizes the dispute process through the deployment of AI agents. From case intake to chargeback filing, these agents handle a wide range of tasks, streamlining the dispute resolution process. AI analyzes patterns, predicts outcomes, and performs key actions like issuing credits and filing disputes. Casap’s system also assigns a “fraud score” to pinpoint suspicious instances effectively.
Financial institutions such as Chartway FCU and MidSouth Community FCU have reported a significant decrease in fraud-related losses after adopting Casap’s technology. They noted a 51% reduction in losses while achieving return on investment in a matter of weeks. The unified system allowed these organizations to manage more cases without the need for additional staffing.
According to Carlotta Siniscalco, a partner at Emergence Capital, “First-party fraud is on the rise, and financial institutions are armed with outdated tools.” Casap aims to transform the trust landscape in financial services, as Siniscalco noted, “Casap turns disputes — one of the most emotionally charged moments in finance — into an opportunity to earn trust, the only currency that matters.”
Various investors, including Lightspeed Venture Partners, Primary Venture Partners, and SoFi, participated in the funding round, marking a notable milestone for Casap in the payment disputes arena. The company plans to channel the funds into workforce expansion and broaden application across the payment lifecycle.
While first-party fraud remains a persistent challenge, the infusion of funds and enhanced AI technology positions Casap as a crucial player in mitigating such risks. By improving efficiency and accuracy in dispute resolution, solutions like Casap’s are poised to reshape how institutions handle fraud, paving the way for more secure financial operations.
