Companies, including retailers and financial services organizations, can now combat CAPTCHA fraud, especially as busy holiday season approaches

Stytch, the company building an all-in-one platform for identity and access management, announced Strong CAPTCHA, the first product in a suite of security products to reduce online fraud and risk. The product solves the massive problem of CAPTCHA fraud that hurts consumers and damages the brands of online retailers, financial services firms, and other companies.

Every CAPTCHA system today exposes its public key, making it easy for bots to scrape and submit the public key to a “CAPTCHA-solving-as-a-service” company, commonly referred to as a CAPTCHA farm, where people manually solve CAPTCHA tests for bots for a living. As a result of bots being able to solve CAPTCHA challenges, bots can create fake accounts, spam boards, scoop up inventory before humans, and other negative consequences.

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“Today, humans only make up 38.5 percent of internet traffic. The other 61.5 percent is non-human in the form of bots, hacking tools, and so on”

With Strong CAPTCHA, Stytch has completely removed the public key site from the CAPTCHA architecture, leaving users with the same exact experience, but making it impossible for bots to scrape and mass attack applications. The solution enables businesses to interact with legitimate customers. It also cuts costs for businesses in the form of fraud, wasted resources, and time.

“Today, humans only make up 38.5 percent of internet traffic. The other 61.5 percent is non-human in the form of bots, hacking tools, and so on,” said Reed McGinley-Stempel, Co-Founder and CEO of Stytch. “This incessant bot activity defrauds both users and businesses, but CAPTCHA systems are not resolving the problem due to CAPTCHA fraud. Strong CAPTCHA eliminates the public key loophole in the CAPTCHA architecture to thwart widespread CAPTCHA fraud.”

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Companies suffer reputation damage; customers get a bad experience

CAPTCHA fraud harms many types of businesses. For instance, for e-commerce retailers, bot fraud has devastating consequences. When major brands introduce limited edition or hard-to-obtain goods, people often use bots to snag the items. They then subsequently resell them at a much higher price. This results in a bad experience for legitimate customers and has negative effects on brand trust. Companies, in turn, must deal with unhappy customers who are not able to obtain the goods they want.

The effect is amplified on Black Friday, as bad actors use bots to snatch up deals and inventory and resell the goods at a markup. Stytch’s Strong CAPTCHA makes CAPTCHA impregnable to bots and CAPTCHA farms, so brands can ensure that legitimate customers are interacting with their brands and can purchase the goods they desire firsthand.