MITIGATING RISK MITIGATING RISK IN GIFT CARD SALES IN GIFT CARD - PowerPoint PPT Presentation

MITIGATING RISK MITIGATING RISK IN GIFT CARD SALES IN GIFT CARD SALES March 2019

MEET RISKIFIED MEET RISKIFIED We’re an AI platform helping optimize We’re an AI platform helping optimize the online shopping journey the online shopping journey Login Login Checkout Checkout Authorization Authorization Fraud Review Fraud Review Post Checkout Post Checkout Over 330 Over 330 194% CAGR 194% CAGR $64 million $64 million employees employees (2014 (2014-2018) 2018) in funding in funding

THE INDUSTRY THE INDUSTRY 65% 65% $320B $320B $510B $510B 10% 10% of recipients spend global gift card market expected gift card YoY growth more than 38% of the in 2017 market by 2023 card’s value

THE OPPORTUNITY THE OPPORTUNITY Holidays digital good sales Holidays digital good sales Gift cards are one of the top items on the buying list of shoppers during holiday sales

THE BUYERS THE BUYERS 3 different purposes 3 different purposes As a gift As a gift ~ 60% of consumers like receiving gift cards As an alternative payment method As an alternative payment method To send money, buy goods that won’t appear on credit card bill, etc. To commit fraud To commit fraud

FRAUD FRAUD CHALLENGES CHALLENGES High value, no weight High value, no weight Even when gift cards represent only 2% of sales volume, they can account for up to 1/3 of chargebacks

TYPES OF FRAUD TYPES OF FRAUD 3 categories of CNP fraud 3 categories of CNP fraud Common fraud Common fraud Stolen credentials, the mixed cart scheme Sophisticated fraud Sophisticated fraud ATO, fraud rings, bots Chargeback abuse Chargeback abuse Non-premeditated, liar buyer

THE SELLERS THE SELLERS 3 types of players 3 types of players Retailers Retailers Sell gift cards and other goods Gift card Gift card-only merchants only merchants Peer to peer marketplaces Peer to peer marketplaces Second-hand gift cards marketplace

Risk Differs for Risk Differs for Open Loop vs Closed Loop Open Loop vs Closed Loop Different Types of Different Types of Gift Cards Gift Cards Plastic Plastic Digital Digital x 1.5 x 1.5 x 8 x 8 Closed-loop Closed loop fraud rate Open Open-loop loop fraud rate

PROTECT YOURSELF PROTECT YOURSELF Devise specific Remember that Track behaviour Account Link and tag Collect evidence strategy for gift proxy detection and anomalies protection tools orders and dispute cards is key chargebacks

APPROVE MORE ORDERS APPROVE MORE ORDERS Don’t rely too heavily on Link the email to the Identify returning Look for personal clues: AVS, or outdated fraud customer’s name and customers promo codes, photos, detection systems location messages, etc.

CLIENTS CLIENTS

Thank you for your time For any questions please contact: sophia.miller@riskified.com +972 539 229539 For additional information, visit: www.riskified.com