Interview with Peter Elmgren, Chief Revenue Officer at Riskified: A Leading Retail Fraud Solutions Provider

We believe everyone should be able to take part in the eCommerce revolution, but outdated solutions and overwhelmed systems create uncertainty and risk. As a fraud management platform, we empower businesses to realise the full potential of eCommerce by making it safe, accessible, and frictionless.

We’ve built an eCommerce risk management platform that allows online merchants to create trusted relationships with their consumers. We work with some of the world’s most well-known retailers – including the likes of Booking.com, Prada, Gymshark, and Wayfair.

By leveraging machine learning, our platform aggregates data from many of the largest online merchants and creates network effects that prevent fraud, drive higher sales and generate cost savings for our merchants. By accurately identifying the individuals behind online interactions, our technology enables merchants to provide frictionless customer experiences, as it instantly and accurately recognises legitimate customers and keeps them moving toward checkout.

Riskified processes more than 1 million transactions each day and uses machine learning to identify and prevent fraudulent activity. We have growing teams in New York, Tel Aviv, London, Shanghai, Melbourne, Sao Paolo and Mexico City. In 2021, we went public on the New York Stock Exchange.
 
 

 

How did the idea for the company come up?

 
Riskified’s Founders, Eido Gal (CEO) and Assaf Feldman (CTO) came from a background of fintech startups and industry leading companies. They understood that a better approach to fraud prevention was needed to support the growing needs of the eCommerce industry.

They knew that merchants were taking an unnecessarily cautious approach to reviewing and approving orders, losing revenue, and frustrating customers as a result. They wanted to fix this, which meant approving orders that they believed were good, but that the merchants felt were too risky.

To push the boundaries and get to the level of results that they believed possible, they had to take ownership of the risks of that part of their business. Convincing the merchants to give Riskified the control that it needed meant guaranteeing the transactions, which is how our chargeback-guarantee model was born. For all the orders that we approve, we guarantee that income for the merchant. If we’re wrong, we pay. We strongly believed in our concept – at a time when not everyone else did – and our chargeback guarantee was a “prove it” approach.

Today, Riskified’s offering has grown from a single flagship chargeback guarantee product to an entire suite of end-to-end solutions designed to make ecommerce as secure and seamless as possible. Our suite of solutions can review transactions for fraud, protect customer accounts and saved information, increase bank authorisation rates, block policy abusers and help good customers complete purchases that they otherwise wouldn’t have been able to. All of this is done instantly and behind the scenes, so merchants can focus on serving their customers and growing their business.
 

How did the pandemic impact online merchants and how did Riskified help?

 
The pandemic underlined to merchants the importance of successfully managing their payment risk. It also forced consumers to dramatically alter their shopping behaviour, leading to a huge increase in demand for online shopping. Today, consumers expect to be able to order, pay and sometimes return items bought online as smoothly as possible.

Retailers have found it very challenging to meet this demand and manage these orders as the amount of online fraud has also dramatically risen. Based on our data, a third (33%) of UK retailers said fraud is significantly hurting their profitability.

Retailers not only have to overcome the threat posed by online fraudsters, who are honing their craft with sophisticated techniques, but also provide a seamless experience to their honest customers. They must decide instantaneously which transactions to accept and which to deny and are forced to make a difficult trade-off of sacrificing growth for security or vice versa.

Retailers also have to adapt to the PSD2 enforcement, already underway in most of the EU markets. Our latest eConfidence report showed for instance that two-factor authentication – which can stop a considerable amount of fraudulent transactions – was ranked as the most damaging to revenue for UK retailers, because it can cause frustrated customers to abandon their online shopping carts.

As a result, with authentication and challenge success rates being too low, abandonment and challenge rates being too high, we are constantly adapting our PSD2 optimise product to help more merchants cope with these fallouts, reduce Strong Customer Authentication (SCA) friction for their customers and reclaim failed SCA flows.
 

What can we hope to see from Riskified in the future?

 
We take pride in the ROI and added value we bring to our customers. This is achieved through focusing on our customers’ needs and working with a network of partners to provide the best possible solution to every merchant, in any given market.

We are constantly adding new clients and deepening our connection with existing ones.

Our retention rate is among the highest in the industry (98%) and we are truly excited about what the future holds and how we drive that value with every customer to create this “wow” experience for them and for every single one of their customers.