Online orders: Start-up detects risky buyers for firms
“I used to work in bricks and mortar retail in the 1990s, and there were security dye packs that would explode if you tried to walk out with a pair of jeans,” says Spotrisk cofounder Jordan Lewis.
He says the fraud detection tools used by most online retailers today are the equivalent of those exploding dye packs: expensive, primitive and in-your-face intrusive.
He and business partner John Gregoriadis founded a start-up called Spotrisk last year, after a tidy payday associated with Vend’s sale (keep reading).
They pitch their product as a cheap, seamless way to spot risky buyers, run a verification check and approve or block an online order.
Or as Lewis styles it, the software equivalent of the cheap and discreet security tags used by traditional retailers today.
Their software integrates with two of the largest online shopping platforms, Shopify and BigCommerce, and adopters include fashion label World, gaming PC outfit Playtech and Golf Warehouse.
Spotrisk looks for multiple online shopping behaviours that could indicate a risky buyer.
For example, someone who orders multiple items from the same IP address (that is, the same device or location) and wants each shipped to a different address. Combined with other tell-tale signs, it could mean the buyer is using a fake or stolen ID, and a stolen credit card.
A recent study found a 16 per cent rise in online fraud during the pandemic.
More of us are online shopping, more of the time, and the shift to hybrid working has created security holes that make it easier for hackers to steal credit card numbers and other personal data.
The Government’s Computer Emergency Response Team (Cert NZ) has tracked a rise in such phishing and fraud during the Covid outbreak — and at a time when hard-pressed retailers can least afford it.
Retailers usually aren’t alerted that an item was bought with a stolen credit card until after the order is shipped, which leaves them carrying the cost of the chargeback, facing a potential escalation in credit card fees, and even suspension of their payment facility altogether, Lewis says.
Spotrisk signed up several hundred customers to its software-asa-service product, offered for free. Now, on the back of the start-up joining Shopifiy’s ecosystem (in April) and its BigCommerce integration (announced this week) and new verification features, the start-up has introduced paid plans over the past few weeks, and embarked on growth drive.
Pricing ranges from free (for up to 30 orders analysed per month) to US$25 ($40) per month to (for up to 150 orders analysed to US$99 per month (for up to 1000 orders).
Their target market is the sort of small to medium retailers who create online stores using Shopify and BigCommerce’s platforms, with their various pre-made tools.