Balancing risk and reward: a fair approach to ecommerce fraud prevention

Large retail merchants operating in the rapidly changing world of ecommerce must protect their businesses from fraud while still maximizing revenue. At Signifyd, we understand this delicate balance and have developed a unique risk/reward cost model that aligns with your specific goals and risk tolerance.

The risk-reward tradeoff in fraud prevention

Conventional fraud prevention covers the basics, but fraud attacks launched by sophisticated, organized crime rings barrel through, threatening ecommerce giants with devastating losses. Enter cutting-edge fraud prevention: costlier upfront, yes, but crucial. Using advanced tools and data, Signifyd separates true threats from good customers, optimizing revenue and satisfaction where others fall short. It’s not just stopping fraud; it’s safeguarding against invisible threats. 

Our solution is designed to find the sweet spot that maximizes revenue while minimizing risk.

How we’re different: fair pricing through advanced technology

Our pricing model isn’t just about numbers — it’s about leveraging our vast merchant network, sophisticated AI and deep issuer integrations to create a tailored solution for your business. 

Here’s how we do it:

• Vast merchant data: At Signifyd, no single customer is quite Amazon’s size, but the combination of all transactions across all of our merchants provides us with a shopper profile network that’s greater than the size of Amazon. And of course, that size network doesn’t come without its capacity requirements. On a daily basis, we evaluate over 3 million transactions, instantaneously, while upholding our triple-9 uptime SLAs for merchants.

Why is this important? More data leads to better decision accuracy, which in turn leads to better merchant approval rates, improved performance and greater customer satisfaction. 

• Our performance-centric approach to machine learning:  The scale of our network enables some extremely powerful analysis, but it is also very important to understand the ingenuity and complexity that is applied to massive amounts of data to deliver top performance. To deliver market-leading performance, we focus on two critical aspects: model operations and feature engineering.
• Model operations: Fraudsters continuously adapt their strategies, exploiting new vulnerabilities and developing sophisticated methods to evade detection. To counter this, Signifyd’s machine learning model operations involve a cycle of continuous monitoring, learning and updating. We have developed frameworks to promote targeted training of models with retail-specific or even customer-specific models that are finely tuned to distinct needs. Additionally, we’ve also invested in automated, rapid model refreshes to ensure new training patterns are quickly integrated into a model’s context thus always ensuring high performance. 
• Feature engineering: In the complex world of fraud detection, the subtle indicators of fraudulent activity often lie in the intricate relationships among different data points. Through anomaly detection technology, Signifyd can uncover these hidden patterns, creating composite features that capture nuanced behaviors across multiple dimensions. This process enables us to differentiate between legitimate transactions and fraudulent ones with greater precision, even as fraudsters become more sophisticated. 
• Humans in the loop: Signifyd has deployed a team of retail experts to help identify emerging fraud and abuse patterns across the commerce network in addition to our ML model to promote continuous feedback and improvement. They work closely with merchants to educate them on relevant trends and offer expert guidance on policies and strategies for deterring fraud and abuse attacks.
• Automation workflow management: Relying on manual workflows to conduct discovery, analysis and resolution delays business impact. Repetitive tasks and cumbersome manual analysis waste time, introduce errors and add significant overhead costs. Our solution is designed to enhance your team’s productivity through intelligent workflow management thus saving you both time and money.

With Signifyd you will:

• Automate the more mundane, repetitive aspects of fraud management, allowing teams to focus on more strategic tasks.
• Promote analysis and resolution across diverse teams over complex tasks, such as tools that help identify the patterns and determine thresholds to apply to automation configuration.
• Boost confidence by accessing exhaustive methods to test and simulate the impact on the business based on historical data and proposed new strategies with live event traffic before going live with changes, thus making your team smarter and faster.
• Offer flexibility with the ability to enhance or override AI-driven decisions, thereby enabling you to maintain control over your risk management processes. We tune performance thresholds for optimal results. Using these powerful tools, we fine-tune performance thresholds that align with your specific business goals. Whether you’re looking to aggressively expand into new markets or maintain a more conservative approach, we adjust our fraud prevention measures accordingly.

Risk-smart approach: maximize margins, minimize fraud

Our pricing model puts you in the driver’s seat. For most orders, you have precise control over fraud prevention costs. But we don’t stop there. Signifyd gives you the flexibility to pursue revenue in higher-risk segments, all while protecting you from significant losses. By breaking down costs by risk category, you gain unprecedented visibility into your spending. This granular approach allows you to fine-tune your checkout flows, maximizing profit margins across all risk levels. 

It’s about giving you the tools to make informed decisions, balancing caution with opportunity, and ultimately controlling every dollar spent on fraud prevention. With our model, you’re not just preventing fraud – you’re optimizing your entire ecommerce ecosystem.

Here are some key features of our cost model:

• Outcome-based pricing: We align our success with yours by tying our fees to measurable business outcomes. Signifyd gets paid for every successful transaction, ie. when a transaction is approved by Signifyd and authorized by the bank. Thus, we are incentivized to improve your bank authorization rate as it directly impacts our revenue. 
• Flexible pricing approaches:  Our innovative pricing models align our success with yours. We’ve designed a flexible tiered-based approach that directly links our fees to the performance of our fraud management service. This structure incentivizes us to maximize your approval rates while effectively controlling fraud risk. By doing so, we’re not just providing a service; we’re actively working to optimize your revenue. This performance-based pricing ensures that as your business thrives, we thrive alongside you, creating a true partnership in fraud prevention and revenue maximization.
• Boost transparency from day 1: At our core, we believe in transparent pricing from the outset. Unlike some vendors who lure merchants with artificially low initial costs only to increase them later, we take a different approach. We engage in open discussions early on, focusing on a clear risk-reward balance tailored to each merchant’s specific goals. This transparency allows us to create a pricing structure that truly benefits our enterprise clients, without hidden clauses or unexpected increases. Our commitment is to provide top-tier fraud management solutions with pricing that’s as straightforward as it is fair.

Conclusion: a partnership in fraud prevention

In the complex world of ecommerce fraud prevention, you need more than just a service provider—you need a partner. At Signifyd, we’re committed to providing that partnership through our cutting-edge technology and our fair, performance-based pricing model. By balancing the risk-reward tradeoff in a way that’s tailored to your business, we help you achieve your goals while keeping fraud at bay. It’s not just about preventing fraud; it’s about empowering your business to thrive in the digital marketplace.

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Ready to experience a new approach to fraud prevention? Contact us today to learn how we can help your business grow securely.