Ballerine Introduces Agentic Detection to Stop Merchant Fraud Early as AI Scams Rise

New scam prevention solution detects high-risk merchants and coordinated fraud networks in under 60 seconds, before transactions occur

SAN FRANCISCO, April 21, 2026 /PRNewswire/ -- Today, Ballerine, the AI-native merchant risk and compliance platform, goes live with a new agentic detection solution, Scam & Fraud Detection API, that identifies high-risk merchants and fraud networks before transactions occur in less than 60 seconds. Instead of relying solely on transaction monitoring or static onboarding checks, the solution analyzes the broader context around a merchant, including digital footprint, behavioral signals, ownership structures, and ecosystem connections, ensuring that fraudulent activity is stopped in its tracks.

The launch comes as merchant-driven fraud becomes increasingly automated and industrialized, prompting some in the payments industry to label this emerging trend an "AI scamdemic". Scam operations that once required months to establish can now be built and scaled in days, presenting as legitimate businesses while concealing coordinated, high-risk activity beneath the surface. Coordinated groups now operate across multiple identities, geographies, and payment providers, frequently evading detection until significant losses have already occurred. As AI tools can now bypass traditional rules, modern defense has shifted from looking for errors to analyzing intent, behavior, and identity signals. Financial institutions and organisations are turning to AI as a digital shield. By using advanced machine learning to detect the subtle, non-human signatures that AI-generated fraud leaves behind, AI can detect anomalies, flag high-tech forgeries, and stop suspicious activity before damage is done. 

"The industry is facing a structural gap as fraud has evolved into coordinated, AI-powered operations, while many risk systems are still built for a slower, manual world. If it takes days to determine whether a merchant is risky, that gap is already being exploited at scale," said Noam Izhaki, Co-founder and CEO of Ballerine. "Our Scam & Fraud Detection API solution can determine a malicious merchant in less than 60 seconds and block fraudulent transactions before they happen. This new offering demonstrates our commitment to adding another layer of protection to our customers as new trends arise." 

Unlike traditional approaches that assess individual merchants or transactions in isolation, Ballerine's Scam & Fraud Detection API solution is designed to detect surface patterns across networks of merchants. It identifies clusters of related entities, discrepancies between declared and actual business activity, early signals of transaction laundering, and hidden high-risk activity embedded within otherwise legitimate storefronts.

"What we are seeing is not just more fraud, but more structured fraud," said Cihat Fitzgerald, Chief Risk Officer at Ballerine and former Head of Ecosystem Risk at Visa. "These are coordinated systems designed to move across acquirers and geographies. That creates pressure across the entire payments ecosystem".

The launch is supported by research from The Synthetic Merchant Economy: How Fraudulent Merchants Are Infiltrating the Payment Ecosystem, a new book authored by Noam Izhaki. Based on analysis of tens of millions of merchants, the research identifies repeatable scam models, including synthetic merchant identities, deceptive storefront networks, scam subscription structures, and transaction laundering operations. Rather than isolated incidents, these patterns behave like scalable systems that adapt faster than traditional detection methods.

A central finding from both the research and the solution's development is the widening mismatch between how fraud operates and how it is detected. While AI has significantly reduced the cost and complexity of launching scam operations, many financial institutions continue to rely on fragmented signals and delayed review processes. As digital commerce advances toward agent-driven transactions, this challenge becomes even more critical. In an ecosystem where software agents autonomously discover, evaluate, and transact with merchants, the ability to assess merchant legitimacy instantly will increasingly define how trust is established across agentic commerce ecosystems. 

About Ballerine

Ballerine is an AI-native risk intelligence platform built for financial institutions, acquirers, and payment providers that need to underwrite and monitor merchants at scale. Its AI agents continuously analyze signals across business registries, transaction data, and web intelligence to deliver dynamic, explainable risk decisions across the merchant lifecycle.

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SOURCE Ballerine