May 10, 2022
May 10th, 2022; Fraugster, an AI payment intelligence company is partnering with Kipp (formerly known as Kenbi), an AI platform that helps global merchants, banks, and card issuers approve more transactions. The partnership will tackle a growing problem of issuer declines, caused by an imbalance between the data available to merchants and issuers when it comes to approving or declining e-commerce transactions based on fraud risk.
By sharing AI enriched data in real time with issuer banks, Fraugster and Kipp will boost e-commerce approvals.
Very often an issuer might be about to decline a transaction that has been approved by the merchant because they are missing data about the login location and device, which flags the transaction as high risk. Were they to receive IP address data to confirm a login location match and a mobile device ID, they would be able to approve.
Fraugster will provide issuers using Kipp’s platform with additional data points, in real time, so they have the confidence to approve more transactions. The partnership is focussed on increasing final approval rates for merchants, by allowing merchants to participate in the cost of risk to save a transaction. For example, if a merchant declines 5% of all transactions and issuers decline another 8%, on average, the baseline final approval rate is 87%.
For a merchant processing €1 Bn EUR per annum, this represents €130 m EUR of declined transactions. By delivering AI enriched data to issuers in real-time, Fraugster gives issuers the confidence to approve an additional 4% of transactions, pushing the final approval rate to 91%, which represents a €40m revenue uplift. At an average bid price of 3% the merchant would invest €1.2m per annum to generate an additional €40m.
Quick To Configure
In order to start using the solution all the merchant needs to do is signup and configure their policy. The policy contains a set of rules which define the willingness of the merchant to participate in the cost of risk with an issuer. The data is then automatically shared with participating issuers. The merchant policy can be updated at any time using the Kipp platform.
If you are struggling with issuer declines and see an opportunity to boost approval rates we would love to hear from you.
Fraugster is a Berlin based payment intelligence company. Fraugster enables the world’s leading merchants, global payment companies like Worldline and Ratepay to intelligently manage the impact of fraud to minimize the costs of fraud, maximize revenue and improve customer experience. Fraugster has developed one of the most accurate AI fraud prevention solutions in the market and is backed by leading deeptech investors Earlybird, Speedinvest, CommerzVentures and Munich Re Ventures.