The Israeli Startup That Keeps Your Credit Cards in Check

Billguard can monitor your credit card purchases and raise the red flag of suspected fraud, giving you peace of mind to shop without fear.

Do you go over your credit-card statement at the end of every month, checking whether you made every single purchase on it? If the answer is no, you’re not alone. According to the Israeli startup Billguard, 90 percent of people never even look at their credit-card statements. At best, they go over the large purchases they made. But all those little impulse buys, the dollars and cents of daily life? They hardly give it a second thought.

As a result, consumers fall victim to fraud. Billguard’s officials say that the average user loses $300 per year from unwanted charges that they don’t know about.

To protect you plastic-wielding shoppers, Billguard developed a platform that allows people to keep track of their bank accounts and credit cards via a website or application. They can look at a list of recent charges and even receive automatic updates any time a suspicious charge shows up.

Billguard says that the most commonly-spotted frauds are credit-card fraud, monthly subscription fees and terms of service that change once a person has signed up for a service. Company officials believe Billguard’s platform has saved users $50 million, in tens of millions of bank and credit-card accounts, in the year since its launch.

When account owners are “stung,” they mostly fall victim to common kinds of fraud. To combat this, Billguard uses crowd-sourcing. When its system spots a suspicious charge, it alerts the account owner. All customers who find a hidden or fraudulent charge on their account report it to the service, which immediately finds and alerts all other users who have the same charge.

Among Billguard’s customers are banks and credit-card companies who use the service for their customers. Raphael Ouzan, co-founder and CTO of Billguard, says that the company gives banks a threefold value: better protection, better end-user experience and a cost savings in the number of customers who contact them to clarify charges. The service is provided for free to the end-users while the banks and the credit-card companies pay for each customer. Billguard also collects a fee from merchants who owe customers their money back.

At Google’s I/O conference earlier this month, it was announced that Billguard’s technology would be integrated into Google Wallet, Google’s virtual moneybag for in-store and online shopping, and that it will also be integrated into the new version of Gmail. Billguard’s platform will serve as an additional layer of protection for users who make online payments by spotting irregularities and “gray” charges. Google’s goal is to make it easier for users to adopt Google Wallet and use it safely. Besides the prestige in working with Google in the security field, Billguard’s larger user base will enable it to improve the quality of its service.

Billguard was established in 2010 by Yaron Samid, the CEO who manages its work in New York, and Raphael Ouzan, who manages its development work in Israel. So far, the company has raised $13 million from a series of prominent investors from Silicon Valley including Bessemer Venture Partners, Khosla Ventures, Google CEO Eric Schmidt’s Innovation Endeavors, the Founders Fund of Peter Thiel and Sean Parker, and Israeli angel Yaron Galai.

Most of Billguard’s 22 employees work in Israel.

Bloomberg
Bloomberg