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If a bank’s merchant is selling illegal goods online, Jewel Paymentech wants to be the company in charge of finding the perpetrator

Jewel Paymentech, a Singapore-based financial risk management startup, has announced that it has raised S$1.5 million (US$1 million) in Series A round of funding, led by Kuala Lumpur-based Tuas Capital Partners.

Singapore-based 8capita, an investment partnership focused on Internet and mobile, along with a few unnamed institutional and private investors, also contributed to the round.

The funds will be used to hire developers, data scientists and business development managers, as well as to roll out new solutions to online financial risk problems.

Founded in 2014, Jewel Paymentech aims to improve the security and visibility of e-payments for banks. It is essentially selling a service that alerts banks to potential sources of illegal online commerce, giving the banks a heads-up so they can act accordingly.

“What we have seen in the past couple of quarters is that [institutions] have hosted merchants that are illegal. So, that’s where our application comes in — to identify illegal activities early on,” Group Managing Director for Jewel Paymentech Wooi Siang Lee told e27.

Typical illegal merchant activity might include selling counterfeit goods, hosting online gambling sites or using the Internet to facilitate prostitution.

“The bank [can then] make sure the merchant gets the penalties, not the banks,” said Lee.

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Jewel Paymentech uses machine learning technology and applies predictive analytics on merchants, so banks can evaluate due diligence and potential risks of fraud. The company also uses automation to detect illegal and counterfeit goods.

“We look to see if a merchant has a website, what has been trending and what they have been talking about. We put it together to score it. [If it is worrisome] we tell the bank ‘Hey there was an exceptionally high level of engagement and it was exceptionally negative so you need to engage your merchant,’” Lee said.

The company operates on a subscription-based revenue model, and the pricing varies depending on the number of merchants of the bank.

Lee said one of the top goals for Jewel Paymentech in the coming year is to find partners across Southeast Asia. Top-tier banks are certainly an aspiration as the merchant portfolio will be much larger.

Currently Jewel Paymentech is working with some banks, including DBS Bank in Singapore, on a pilot basis.

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Jewel Paymentech also offers a hardware called SW100. It is a transaction router that can swipe e-payments during the period between paying for goods or services and approval by the bank.

“It identifies Apple Pay and Samsung Pay. The hardware is a solution the flies in between [the transaction]. It generates lots of information for the banks,” said Lee.

Jewel Paymentech was named by SWIFT Startup Challenge as a promising fintech company and also received the ACE startup grant award from Singapore’s SPRING institution under the Ministry of Trade.

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