As a risk management service that specializes in fraud prevention and data analysis, we understand the power of reporting tools and performance tracking. Our customers value information that helps analyze exactly what is going on in their sales pipeline – order review included. That is why we continue enhancing the features and analytics presented via the Riskified dashboard.Read More
For online retailers, CNP fraud is a serious problem that will only get larger as the eCommerce market continues to grow. According to a recent report, fraudulent eCommerce transactions are projected to increase by 55% over the next 3 years, reaching approximately $18.5 billion by 2018 in the US market alone.
Despite this harsh reality, senior management isn’t giving this issue the attention that it deserves, as executives fail to recognize the correlation between fraud management and the company’s overall growth and success. It is common practice for fraud prevention to be assigned as a secondary task to the customer service or payments teams, and the resources allocated to handle fraud are insufficient. On top of that, fraud managers’ success is measured in very narrow terms. The wrong incentives and performance metrics are being put on the people managing fraud – more focused on lowering chargebacks than on protecting revenue.
In this post, we set-out the value of fraud management operations as a whole, and why it is imperative that senior management play a larger role and assume responsibility for this issue.
Why eCommerce CEOs Should Care About Risk Management
C-suite managers in eCommerce companies need to pay greater attention to online fraud management operations, because failing to appreciate the importance of risk management can negatively affect the entire organization’s success in a number of ways:Read More
Riskified had the opportunity to attend and exhibit at two great industry events in April –
Magento’s Imagine Commerce summit and Demandware’s XChange show. We met fascinating people and heard many insightful panel discussions, and wanted to share our impressions.
In the days when there was no Internet, nearly every business was local. There was no way small retailers could reach customers outside their geographical territory. But things changed dramatically with the emergence of the Internet and the advent of eCommerce. Nowadays when you decide to sell something online, you can have customers from any corner of the planet. Many retailers have an overwhelming urge to become global eCommerce brands; and why not? Every business needs more and more customers to grow, right?
But selling in the international market can be altogether different to what you may expect if you don’t have experience in cross-border eCommerce. You can not just make an international website for your US or UK business and expect to sell the same way in every country across the world. Having a multi-currency drop down menu on the website and accepting payments via credit card doesn’t make you a global seller. A lot more planning and execution work is required to develop an international market for your brand and it can be a long but rewarding journey for your eCommerce business. In this article, we want to provide advice about some critical steps involved in building a successful, global eCommerce brand.Read More
Last week, the annual Merchant Risk Council (MRC) Conference was held in Las Vegas, marking the marquee event for the risk and payments industry. Over 1,400 professionals from across the globe gathered to share their views on the biggest challenges, trends and opportunities around CNP fraud.
The Riskified team left the event inspired by the energy present among both merchants and solution providers and the desire to solve the big challenges that exist today. Having had a week to reflect on the hundreds of conversations and presentations, a few things are abundantly clear for our industry:Read More
We’re excited to officially launch our ‘Beat’em’ feature today. The feature, which analyzes online shoppers’ heart rate to identify fraud, was piloted for the past year with select beta merchants with outstanding results, and is now available to all eCommerce merchants.
‘Beat’em’ utilizes the same knowledge on which polygraphs are based, to identify excited or nervous behavior. A baseline heart rate is established within the shopper’s first few clicks or swipes on the site. This baseline is then compared to the customer’s heart rate at the checkout stage – when fraudsters use stolen credit card information to complete the transaction. Thanks to ‘Beat’em’, the Riskified shopfront beacon, a snippet of code embedded in every page of a merchant’s website, can now track not only browsing behavior within the site, but also the visitor’s typing speed & heartbeat.Read More
We understand how vital customer experience is to the success of eCommerce businesses, which is why our service is designed to be streamlined and frictionless. By instantly reviewing orders for fraud and providing clear ‘approve’ or ‘decline’ decisions, Riskified helps merchants keep customers happy and avoid shipping delays.
Order review time, meaning how much time passes between the moment an order is submitted to us for review and the moment we provide our decision, is an important KPI at Riskified. We’re now sharing this information with you, our customers, via the Riskified dashboard.Read More
The importance of avoiding shipping delays to keep customers happy is something eCommerce merchants understand well. One factor that drives delays is that orders can get ״stuck״ in the manual fraud review queue, awaiting approval. To avoid a backlog in the queue, merchants usually either hire additional analysts to join the manual review team or invest in improving the automated decisioning process so that less orders are routed to manual review.
In the 2014 Merchant Risk Council Fraud Survey, online merchants reported an average manual review time of 15 minutes per order, not at all bad. Unfortunately, we still see cases of merchants who don’t suffer from lack of resources but leave orders “sitting” in the queue for hours and even days. Orders are delayed not because the merchant cannot handle the load, but because of order review policies. The risk management team is instructed to reach out to customers for additional information in case of certain problematic characteristics, such as missing AVS information or a mismatch between the BIN country and shipping country. The orders are put “on hold” while the risk management team waits to hear back from the customer who placed the order.Read More
The Merchant Risk Council’s 2014 Global Fraud Survey showed that the average online store declines 2.6% of all incoming orders due to fear of fraud. For a $25 million business, this means you’re rejecting orders worth $667,000 annually. But the cost of declines is even higher than the lost sales revenue alone.
To understand the true cost of declines, one must consider all the factors involved in a holistic risk management approach – including the sales and marketing investment that goes to waste when an order is declined. Whether online media, SEM, or social media campaigns, eCommerce companies invest considerable funds and energy in customer acquisition and retention – bringing users to the website, converting them into customers, and trying to ensure they become repeat customers. Successful online fashion retailer ASOS, for example, invested a whopping ~$845 million in marketing in 2014, equivalent to 12.6% of its annual operating costs. If their decline rate were average, one could say 2.6% of that marketing budget, or ~$22 million, was lost due to fear of fraud. Add the lost life time revenue from good customers whose order was wrongly rejected, and you start getting an idea of how costly declines can be.
In this post, we share our philosophy of how to calculate the true impact of declines on your business.
To fully understand the impact and cost of declines for your business, the following factors should be considered:
- Customer Acquisition Cost (CAC)
What is the cost of bringing users to your site and converting them into customers?
- Customer Lifetime Value (LTV)
How much revenue does the average customer generate for your company over time?
- Impact of Falsely Declined Orders
What is the financial impact of false positive declines on your business?
- Impact of Wrongly Blocked Orders
What is the financial impact of blocking orders before they reach your fraud team?
We’re happy to announce the launch of the Riskified Resource Center, where all of our online risk management and ecommerce fraud prevention content can be accessed.
Whether you’re struggling with a high decline rate, building a fraud team, or looking to expand your online business internationally – our resource center has something for you.
We aim to create actionable, valuable content. If there’s something you’d like us to talk about, we’d love to know. Simply click here and press the ‘Let us know!’ button at the bottom of the page.