Delivery Hero tucks into risk management

Delivery Hero is a marketplace for food delivery, connecting local restaurants with hungry diners across five continents including Europe, Asia and South America.

The company has been working with Adyen since 2012 and currently processes payments from Germany, Austria and Australia on the Adyen platform.   

With Delivery Hero’s success came increased visibility and higher rates of fraud, leading to a rise in fraudulentchargebacks.

The effect of this is two-fold: Not only is it a drain on both financial and internal resources, but it also increases the likelihood of being flagged as ‘high-risk’ by the card schemes, which will affect overall authorization rates.

The solution came with Adyen’srisk managementsystem RevenueProtect.

Using Adyen’s in-depth transaction data, RevenueProtect defined intelligent rules, specific to Delivery Hero’s business model, to identify and block fraudsters, meanwhile, while legitimate customers could continue to place orders unhindered. 

Using RevenueProtect’s extensive list of risk checks, the two companies worked together to fine-tune Delivery Hero’s risk settings to target fraud while keeping friction to a minimum.

“RevenueProtect is a great, targeted risk management system. Thanks to its data-driven approach, our chargebacks have decreased by 78%, and our false positives were reduced by 50%. This means we are not only blocking fraudsters, but actually also approving more genuine customers.” Kathrin Renner, Senior Payment Manager

3D Securehas a mixed reputation. On one hand, it is a useful tool to prevent fraud, providing merchants with a liability shift.

On the other hand it can have a negative impact on conversion rates meaning that, in some markets merchants choose to abandon it completely.

This was the case in Germany, where Delivery Hero was not using 3D Secure at all.

Now, to combat the high rate ofchargebacksfrom high-value transactions, 3D Secure is applied dynamically to high-value transactions.

"Since implementing Dynamic 3D Secure in Germany, we have seen 60% fewer chargebacks. Importantly, it has had zero impact on our conversion rates. It is an effective way of blocking fraud without unnecessarily disrupting the order process.” Kathrin Renner

In Europe, local payment preferences can vary as much as local languages. In Germany for example, customers prefer to pay using direct debit, online banking or invoicing.

Adyen supports all popular localpayment methods, making it easy for Delivery Hero to add additional methods to cater to local markets. 

For Delivery Hero, it is important that payment is instantaneous, making online banking method SOFORT an ideal choice in Germany.

 “With Adyen it is easy to add new payment methods, all which can be managed from the same integration and just one contract. This has had a great impact on our business; in Germany for example, SOFORT now accounts for 10% of our orders.” Kathrin Renner

Delivery Hero has big plans in terms of future expansion. And its next step is to consolidate itsonline paymentsacross all countries, establishing a scalable infrastructure to support future growth.

Adyen’s global payments technology plays a central role in this, allowing Delivery Hero to acceptmarketplace paymentsfrom customers anywhere in the world, and manage everything from oneunified commercesolution. 

“We are excited to be partnering with Adyen to drive our ongoing expansion. It will make it easier for us to operate in markets like South America, and support local payment methods, rather than having to rely on cash.” Kathrin Renner

The two companies will continue to work side by side to drive Delivery Hero’s ongoing success. Adyen’s team of local experts is on hand to guide the company’s payment strategy, driving optimization and powering future growth. 

“With Adyen, we don’t only have a great payments solution, but also access to an excellent team of young, smart people, who are dedicated to get the utmost out of our payments. And the results speak for themselves. It just proves what can be achieved with payments. When done right, it becomes a strategic advantage.” Kathrin Renner