For the sake of all that’s right and good in the world, BillGuard should become wildly successful.

The service alerts credit and debit card holders to fraudulent and deceptive charges, smoking out the bad guys through crowdsourced flagging and some novel big data science.

And today, it’s unveiling a new platform to make settling those disputes even easier.

Everyone raved about the Israeli and NYC-based company when co-founders Yaron Samid and Raphael Ouzan launched at TechCrunch Disrupt last May, and the company is now amply funded with $13 million total from a tier one cast including Khosla Ventures, Peter Thiel’s Founders Fund, Eric Schmidt’s Innovation Endeavors and seed backers Bessemer, SV Angel, IA Ventures, Founder Collective, and Social Leverage.

Here’s a web service that solves a very real problem (who checks their charges as carefully as they should?), with a slick and intuitive UI and massive target market. At launch, Samid and Ouzan presented a freemium model, intending to charge cardholders for BillGuard protection beyond their first card.

But soon after, following feedback from panel judge Fred Wilson and others, the founders decided to remove all user friction and focus on what Samid referred to on Quora as “BillGuard’s multi-billion dollar opportunity… in the backend with banks and merchants.” For the revenue model at least, it was goodbye consumer web service, hello enterprise software for large financial institutions. Bigger stakes, but that’s also a radically different sales cycle.

Now, it’s clear that BillGuard really does ultimately belong on the bank point of the card customer-merchant-bank triangle, since banks hold all the essential transactional data and real authority in card transactions.

In truth, BillGuard is the type of anti-fraud service that card issuing banks should have produced on their own, long ago. But the very reason why they never did so is what presents a massive challenge to BillGuard at this stage: retail banks are lumbering, reactive beasts that simply don’t function in anything resembling a consumer-centric or collaborative manner.

Just the opposite – they’re manic about protecting customer data from competitors, and right now are frantically trying to raise the number of little niggling charges they can sneak by their customers in an effort to compensate for billions in lost revenue from new regulation on their overdraft and swipe fees.

That means the banks’ own charges would likely get caught in BillGuard alerts… and you want they should install it on their servers?

I visited BillGuard’s Israeli R&D center this week to talk with 24-year old Ouzan, a veteran of Israel’s intelligence unit and a Davos ‘Global Shaper’,  about how they’ve been tackling this over the past few months. He and Samid, who’s based in New York, bring the right story when pounding the pavement to card issuing bankers – they address the banks’ own pain points.

So while Ouzan himself describes their company to me as “writing the book on consumer centered risk management” and is convinced the only way online security can succeed at scale is “to react fast through collaborative, collective vigilance,” the banks don’t hear all that people power stuff first in BillGuard pitches.

Rather, Chase, Capital One and their ilk receive detailed spreadsheets illustrating how much they can save in call center costs by replacing their expensive teams fielding dispute and nuisance calls with BillGuard. Then the banks hear how BillGuard will greatly improve their currently abysmal user engagement, since – unlike their own missives – BillGuard emails actually get opened by appreciative customers.

Ouzan acknowledges that a shift toward customer-centered, collaborative data sharing requires a whole new way of thinking for the banks, but he’s convinced there are enlightened souls there who are coming around to it, and believes BillGuard has now found the key to nudge them forward.

The company soon plans to launch BillGuard Resolution Center, a lightweight platform that largely removes the bank from the dispute process, placing the bewildered card holder directly in touch with merchants for a first attempt to resolve charge queries. If the merchant doesn’t give the cardholder satisfaction, the cardholder can still turn to her bank to adjudicate a dispute, but BillGuard claims, convincingly, that in the great majority of cases queries should be settled far more efficiently by directly linking merchant and cardholder.

The bank can therefore rid itself of much of the painful and expensive middleman role without ceding ultimate control over the transaction. Upstanding merchants should also love it, since they’re currently charged even for banks’ complaint investigations and suffer heavy fees for breaching a certain threshold of chargebacks (usually 1%).  BillGuard Resolution Center, applied at scale, should drastically lower all chargebacks.

Another big plus if BillGuard can get banks onboard: they currently use Yodlee to scrape customers’ transactions from card issuers’ sites, which can create massive integration and data normalization headaches, but if the banks themselves join the platform the company would gain direct access to clean transaction data.

So are the banks actually biting, choosing cost savings, transparency, data sharing and customer love over everything we’ve come to loathe them for? Ouzan tells me that in fact they are – that BillGuard’s in “very advanced stages” of inking deals with multiple card issuers, and that we can expect announcements on these partnerships over the course of this year.

If that does actually happen with multiple card issuers, it would be the fintech biz dev deal of the decade, signaling a sea change in how banks view their customers and data, and a big win for consumers.

While BillGuard is betting card providers are capable of this kind of radical reform, Dowalla and other upstart mobile payment providers are convinced that credit cards are fundamentally broken due to card providers’ intransigence. These companies hope to cut the intermediary bank out entirely from a next-gen payment process. It’s a fix from within, fix from without type of disagreement and it’ll be interesting to see how it plays out.

BillGuard calls itself “antivirus for your bills” – a terrific and accurate tagline – but when you extend the metaphor it raises a question. Card issuers today are like a cartel of Microsofts in the late ‘90s, dominating their market with a deeply flawed product that regularly exposes their users to malicious threats.

Why didn’t Microsoft acquire a serious antivirus software company like Symantec or McAfee in the late ‘90s or early oughts? Because it was easier to release reactive patches to Windows than it was to accept full and immediate responsibility for their product’s safety. Only when Mac and Linux seriously eating into Windows market share did Microsoft begin bundling a (lame) antivirus solution directly with their product.

Can BillGuard do for Bank of America and Chase what nothing could do for Microsoft? For the millions of cardholders out there with daily exposure to credit and debit card fraud, let’s hope so.

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