A case study into the costs to get to a 1% block rate and 0 manual reviews

Before we understand the client’s use case, we need to gather the pre-requisites for fighting fraud. First, you will need some fraud tool to get a baseline of the standard data on a person to set up any decisioning engines. Trust Swiftly offers basic rules for triggering verifications, but we are believers in machine learning for ultimate automation. After you have a fraud detection tool now like Sift, we can start to add on identity verification. For smaller businesses using the built-in risk engines of payment gateways works well. Stripe, Square, and Braintree have good enough detection for many in the payments industry. If you are a smaller business with less fraud, there typically isn’t a business driver for another standalone tool. Hopefully, at this point, you are paying a few pennies for each transaction analyzed.

Next, we need to open up the business to more transactions by tuning down any fraud rules. For our example, a client of used Stripe Radar for fraud prevention. They used to block transactions with a score of over 80 and manually reviewed anything between 60-80. Instead, they decided to disable the manual review completely and blocking functions. As security is usually a balancing act between risk and rewards this action would need some compensating controls. They looked around for other fraud tools and verification systems but found them all too expensive. They talked to the managed services and insurance solutions but balked at the 1-2% revenue costs. Next, they looked for other data providers and ID verification tools. They wanted all the latest technology and tools to deploy against fraudsters but didn’t want to be stuck in big contracts for all their transactions. Stripe accurately scores many sales, but they wanted to optimize further and stop wasting time on reviews. Their store catered to customers worldwide, and hiring a team to review 24/7 was too costly.

Cost Conscience Verifications

In came Trust Swiftly with the ability to provide over 10 completely automated verification options. Instead of trying to bundle multiple tools together, they were able to leverage one platform that could adapt to any fraud. They knew most of their customers would be turned off by ID verifications and couldn’t justify the high prices for other solutions. They also didn’t want to add in the complexity of development to integrate any of the tools. The majority of their orders were good, so it didn’t justify putting more manual reviews. Instead, they were able to direct the higher risk orders to Trust Swiftly to complete verification. The costs remained low, and the client saw a decrease in their chargeback rate. Customer satisfaction also increased as declines were met with acceptance. They also were able to respect their customers’ privacy by allowing backup verification methods for people who were not comfortable with sharing personal information. Overall, the implementation was a success, and they are more confident in their security of transactions with Trust Swiftly than only Stripe Radar.

You will find that existing verifications do not optimize for both customer and business experience. Typically, the costs of many verification solutions don’t pay their worth. They require expensive contracts or minimum spends which might be more than if you risked more fraud. They don’t account for customer privacy concerns and provide only one path forward, which might be a lost customer for life. Using Trust Swiftly can get you to the confidence levels required where you block less than 1% of transactions and spend no time reviewing orders. 

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