Preventing fraud is a multifaceted and continuous process that demands businesses to remain alert and responsive to evolving threats. Whether fraudsters use different techniques to gather sensitive personal information or take over an account, discerning between fraudulent and legitimate transactions can be challenging.

In the dynamic category of online payments fraud and risk intelligence, Riskified has emerged as one of the pioneering units that has helped redefine the way merchants approach e-commerce risk. Founded in 2013, the company’s journey to becoming a publicly listed entity on the NYSE in 2021 is a testament to its unwavering commitment to innovation and merchant success. With a global team of over 800 professionals, Riskified collaborates with premier brands across 180 countries, optimizing e-commerce revenue and profitability.

Through the adoption of strong fraud prevention practices that fall under the expertise of companies like Riskified, businesses, merchants, and fintechs can safeguard themselves and their customers from monetary losses. Furthermore, this proactive approach also fosters trust and loyalty among their user base.

Elena Michaeli, Fraud and Risk Consultant at the Payments Consulting Network, recently caught up with Jeff Otto, Chief Marketing Officer at Riskified to discuss these pivotal insights that shed light on Riskified’s exceptional journey and its impact on the payments landscape.

A Data-Driven AI Powerhouse

Riskified, a leading player in the emerging category of fraud and risk intelligence, distinguishes itself through its inherent AI DNA. Jeff underscores the company’s foundation in AI and machine learning, a distinct advantage that sets them apart. Riskified’s uniqueness lies in its ability to glean profound insights with a remarkable depth of over 600 attributes per order meticulously integrated into their supervised and unsupervised machine learning models, layered on top of the power of their global merchant network of billions of historical transactions, hundreds of billions of data attributes, and repeat interaction histories for hundreds of millions of consumers. Unlike others, Riskified’s journey began with a focus on machine learning, not as an afterthought layered on-top of legacy rule-based systems. The company’s Tel Aviv-based culture of data science and research & development further fuels their prowess. Over the past decade, these factors propelled Riskified into the largest AI-based Fraud and risk Intelligence platform, as evidenced by its SEC-audited financials and its impressive market presence within e-commerce.

But what really differentiates Riskified from its competitors?

Elena asked Jeff a few questions to better understand Riskified, its solutions, and the tangible benefits it provides to its clients worldwide. Let’s go over them below.

1. Empowering a Business Model for Growth

In their discussion, it was brought up that what sets Riskified apart from other providers touting AI-based solutions lies in its commitment and accountability to business outcomes. In contrast to conventional approaches, Riskified’s business model aligns seamlessly with merchants’ top-line revenue growth and bottom-line profitability through a unique combination of a guaranteed approval rate SLA, only charging for approved orders and assuming responsibility for chargeback costs. The company’s pioneering adoption of this model underscores a fundamental shift from a mere fraud mitigation strategy to a partnership model with the C-Suite of enterprise merchants that centers around delivering financial predictability and assurance. By offering a guaranteed approval rate, Riskified empowers merchants to accept more orders with confidence, promoting customer trust and fostering growth. This innovative strategy anticipates the market’s ever-evolving fraud landscape, ensuring that liability of fraudulent chargebacks remains with Riskified rather than burdening their merchants. Additionally, Riskified’s holistic vision extends beyond fraud prevention, addressing issues like false declines, lifting bank authorisation rates, preventing account takeovers, streamlines how chargebacks are handled/disputed, and provides support for policy protection, catering to a comprehensive spectrum of issues that could arise across promotions, returns, refunds, and reseller abuse. This approach, founded on a deep culture of data science and powered by cutting-edge technology, solidifies Riskified’s position as an industry leader in driving business success through innovative fraud and risk intelligence.

“Given its scale, the evolving spectrum of ecommerce fraud and abuse has become a C-suite problem. The answer is a fraud partner accountable for your business’s success – both predictable top-line growth, and predictable bottom-line profitability. By offering a guaranteed approval rate and absorbing the cost of chargebacks on approved orders, Riskified empowers enterprise-scale merchants across the globe to accept more orders with confidence, promoting a customer experience that leads with trust and fosters loyalty and growth.” – Jeff Otto, Chief Marketing Officer, Riskified

2. A Pro-Growth Approach to Navigating the Landscape

The online payments and fraud arena is plagued by ever-evolving threats, necessitating a proactive stance. Too often, businesses adopt a narrow “just stop the fraud” mentality, which, if unbalanced, can undermine customer experience and brand reputation. Riskified offers a refreshing perspective – pro-growth.

This ethos encourages extending trust to customers, harnessing technology to empower, rather than inhibit, business expansion. Following the pandemic, a staggering $600 billion in false declines have been recorded annually. This equates to 3% of average merchant revenue, a significant missed opportunity. By focusing on pro-growth and customer experience, Riskified addresses this challenge head-on by ensuring revenue uplift and enhanced customer satisfaction. Their approach centers on accountability. They ease the burdens on merchants by reducing the overall cost of fraud while absorbing chargeback liabilities and ensuring a pre-agreed approval rate. As shared in their SEC filings, Riskified’s integration strategy has consistently yielded an average 8% revenue increase and a 39% reduction in fraud-related costs for their top-tier merchants.

This model transforms the narrative, making Riskified not just a solution provider, but a true partner invested in merchants’ success. With Riskified assuming the responsibility for chargebacks, merchants gain newfound revenue predictability and risk mitigation. This strategic shift resonates with CFOs seeking certainty in their financial forecasts to investors, unburdened by uncertainties tied to fraud fluctuations.

3. A Future-Ready Partner

When evaluating fraud management service providers, Riskified offers distinct advantages. Its accountability-driven approach, transparent results, and customer-first ethos stand out. CFOs seeking revenue and cost predictability, along with demonstrated performance, find Riskified’s model appealing. Furthermore, the company offers a distinct return on investment right from the start, providing tangible benefits over other vendors, as consistently evidenced in direct head-to-head pilots. Riskified is not just a provider; it’s a strategic partner driving success.

CONCLUSION

Fraud prevention and management companies like Riskified combine a unique blend of innovation, accountability, and customer-centricity in the emerging category of online payments fraud and risk intelligence. Armed with cutting-edge technology, a growth-oriented mindset, and an unwavering dedication to its partners’ success, these solutions experts don’t just contribute to shaping the industry’s future but also remolding the present. It’s essential to find a seasoned professional equipped with platforms and technologies tailored to assist businesses in this field in minimizing risks and safeguarding against fraud. Additionally, they should ensure a smooth and secure user experience for different types of customers.

Author: Elena Michaeli, Fraud and Risk Consultant, Austin, Payments Consulting Network.

With extensive experience across Fintech, eCommerce, and cybersecurity, Elena Michaeli stands as a seasoned Fraud and Risk Consultant. She engineers inventive solutions for E-commerce and fintech sectors, curtailing chargeback losses and enhancing ROI. With an enduring impact, Elena has woven a path of innovative fraud and risk solutions, strategic negotiations, and an unwavering commitment to advancing global trust and safety. Her contributions stand as a testament to her vital role in countering the ever-present threat of cybercrime.

Riskified is a member of our Fraud and Chargeback Management Panel.

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