How Data Eliminates Commerce Fear and Protects Online Transactions

Raj Ramanand never thought it was right that online merchants were responsible for managing their own fraud protection and that when a fraudster got past their defenses, the merchant took the loss — lost sale, lost product, lost fulfillment and delivery costs and lost money in the form of fees and fines.

It’s the key reason that he and Michael Liberty in 2011 co-founded Signifyd, a company that uses big data, machine learning and human expertise to enable online retailers to conduct fearless commerce — free from worries about online fraud and consumer abuse.

In a brief SectorWatch interview earlier this month, Ramanand talked about the difference between credit card fraud in a brick-and-mortar store and credit card fraud in ecommerce. He explained, in the video below, the role of data in sorting legitimate orders from fraudulent ones and examined the role of fear in constricting revenue growth.

Signifyd, in fact, was a pioneer in guaranteed fraud protection, which is how fraud protection providers have the skin in the game that Ramanand referred to in the interview. It was not just a new way to protect online merchants against fraud, it was a new way to think about fraud protection altogether.

The ecommerce market quickly embraced the data-centric solution over legacy systems, which rely on static rules and much more human intervention in deciding when to ship an order and when to decline it because of fraud red flags.

Signifyd’s own trajectory is a testament to the adoption of guaranteed fraud protection by merchants of all sizes. Last year, Signifyd secured a $100 million round of funding, bringing the total that venture capital firms have invested in the company to $187 million. It also deepened its global presence by opening a sales office in London and a research and development lab in Belfast.

In 2018, Signifyd was also recognized by Frost & Sullivan as the market leader in the guaranteed fraud market and its technology was honored by both Deloitte and CB Insights.

The company has built a Commerce Network of more than 10,000 customers selling to 250 million consumers in more than 100 countries.

So far, 2019 has been marked by additional milestones, including being named No. 1 in customer satisfaction in the fraud protection sector by G2 Crowd.

The company, which has grown to more than 250 employees, also continues to release groundbreaking products and features, including Signifyd Chargeback Recovery, Signifyd INR Protection and Signifyd Seamless SCA. Chargeback Recovery and INR protection build on Signifyd Guaranteed Fraud Protection to offer merchants a solution for handling all kinds of chargebacks, including those that result from consumer abuse.

Seamless SCA provides European merchants with a way to comply with the tougher customer authentication requirements in the European Economic Area that arrive Sept. 14 with the enactment of PSD2. The innovative solution addresses merchants’ worries about killing conversions due to the added friction previously thought necessary to adequately authenticate customers.

In some ways, it all seems a long way from the days Ramanand and Liberty were working to remove the stress of fraud from online merchants. But in many ways, it represents the same mission being executed in a much bigger and broader way.

Photo: SectorWatch screenshot

Mike Cassidy

Mike is lead storyteller at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at mike.cassidy@signifyd.com; follow him on Twitter at @mikecassidy.

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