You’re shopping, you click on the check-out page and your transaction is declined! The Tel Aviv-based antifraud start-up Riskified is designed to stop that from happening.Riskified was founded in 2013 to analyze credit-card transactions for online retailers in an attempt to identify and block thieves. The cybersecurity company counts Burberry, Macy’s, Footlocker and Giftcards.com among its thousand or so customers.Many merchants and payment processing companies are wary about accepting certain transactions, since the companies are liable for fraud and fees. Often, companies will respond to fraudulent purchases by barring transactions from entire locations.
“We saw that fear of fraud causes merchants to leave money on the table,” said Assaf Feldman, Riskified’s chief technology officer and co-founder, sitting down with the Jerusalem Post in the company’s verdant and plant-heavy, open-space office. “Merchants are afraid of approving the bad transactions, which causes them to reject a lot of good customers.”In one scenario, Assaf’s wife tried buying shoes on Aldo while Assaf was working in the US. Since the request came from a computer in Israel, Aldo questioned the location and blocked the transaction.Riskified seeks to update many companies’ old systems for risk management, which are not personalized but rules-based. Such misidentified fraud on the part of e-commerce firms can cost companies millions of dollars.With artificial intelligence and machine-learning tools, consumers can be monitored statistically and behaviorally as they peruse a company’s website, leading to a much higher accuracy rate for transactions.“Let's say someone looks at the returns policy on the site,” said Feldman. “They're less likely to be a fraudster, since fraudsters typically aim to resell the stolen items. On the other hand, if somebody enters the site, sorts the items from most expensive to least expensive, adds that item to the cart and immediately goes to checkout, that might be suspicious behavior.”