A U.S.-based fintech company is taking aim at payment fraud by shifting identity checks to the moment just before money moves. CypherFace, which began commercial operations in 2024, has rolled out a facial biometric system designed to verify a user’s identity ahead of digital payment authorization, positioning the approach as a pre-transaction safeguard against losses that now total billions each year.
Founder Syed Samir Hassan said the company built the platform to solve what he sees as a structural weakness in many fraud programs. In his view, widely used tools are built to spot suspicious patterns after a transaction is underway or already completed, which can leave merchants and platforms dealing with the aftermath. “Traditional fraud tools are reactive by design. They analyze patterns and flag suspicious activity, but the money has often already moved. We’re stopping it before the transaction completes,” Hassan said.
That framing is central to CypherFace’s pitch: rather than relying only on monitoring and post-event dispute processes, it attempts to confirm that the person initiating a payment is genuinely present and legitimately authorizing it. The company’s message is that verification belongs at the most time-sensitive point in the flow, where preventing approval can matter more than analyzing what went wrong later.
Fraud Keeps Rising, and Synthetic Identities Keep Slipping Through
The company’s launch comes as digital payment fraud continues to climb even with layered security in place. In the European Economic Area, payment fraud rose to €4.2 billion in 2024, an increase of 17% from 2023, according to figures from the European Central Bank and European Banking Authority. The same data showed credit transfer fraud rising 24%, underscoring how quickly bad actors adapt to the prevailing safeguards.
A particularly persistent challenge is synthetic identity fraud, where criminals assemble fabricated identities using a mix of real and invented personal data. Those profiles can appear legitimate enough to clear early screening, and the scale of the problem has been growing. False identity cases increased 60% in 2024 compared with the prior year, based on reported figures, reflecting how frequently synthetic identities can pass initial verification because some underlying data points are genuine.
Hassan argued that this is precisely where a live biometric check can change the equation. “Synthetic identities work because they look clean on paper. They pass KYC checks. They build credit histories. But they can’t pass a live biometric verification tied to a real person. That’s the fundamental flaw we exploit,” he said. He also pointed to the increasing use of AI-generated documents and deepfake techniques to get around conventional controls, describing CypherFace’s liveness detection as a way to identify spoofing attempts during authentication.
A Real-Time Check at Checkout, Plus Early Deployment Results
CypherFace offers businesses an API intended to fit directly into payment infrastructure. When someone initiates a transaction, the system triggers a prompt for facial verification. It captures and encrypts a facial scan, then uses AI-driven liveness detection to confirm that a physically present person is authorizing the payment in real time.
The company emphasizes that it does not retain raw biometric data. Instead, facial scans are transformed into encrypted, non-reversible hashes, and the platform sends back only the verification outcome to the merchant, indicating whether the transaction should proceed. Hassan said the aim is a step that feels quick for legitimate customers but difficult to defeat with stolen credentials or manufactured identities. “We designed this to be invisible to legitimate users and impossible for fraudsters,” he said. “A real customer takes two seconds to verify. A criminal using a stolen card or synthetic identity can’t get past the liveness check. The math is simple.”
In one reported deployment, an e-commerce payment processor implemented CypherFace across its checkout setup in late 2024 after seeing heightened chargeback rates linked to card-not-present fraud. Within 45 days, CypherFace flagged more than 1,200 fraudulent transactions that had previously slipped past the processor’s existing security layers. In the monitored segment, the integration cut chargebacks by 62%, and the processor reported higher merchant satisfaction while legitimate transactions experienced little added friction. The company later extended the technology to additional merchant accounts.
Hassan described the product as filling a gap that persists even when organizations invest heavily in network-level defenses and transaction monitoring. “Most fraud prevention happens at the network level or through transaction monitoring. We’re adding a layer that asks a simple question: is the person trying to make this payment actually who they claim to be? If they’re not, the payment doesn’t happen,” he said. CypherFace currently operates in the United States and plans expansion into Canada and Mexico in 2026, targeting payment processors, merchant acquirers, and high-volume platforms facing elevated exposure to fraud and chargeback costs. While biometric authentication has become common across banks and digital finance platforms for account access, CypherFace is concentrating on payment verification at the point of transaction rather than login. “We’re not trying to replace existing security. We’re adding a verification layer at the most critical point in the transaction flow,” Hassan said. “When money is about to move, we make sure the right person is authorizing it. Everything else is secondary to that.”
