CitizenM: Optimizing the customer experience with Adyen
As companies grow internationally, they become increasingly attractive to fraudsters.
But often, fighting fraud means blocking legitimate transactions as well. The challenge is: How do you defend against fraud while keeping risk refusals to a minimum?
Westwing Home & Living is a market leader in online home furnishing in 15 markets worldwide, including Russia and Brazil.
As the company’s success grew, it became a target for fraud. In an effort to block these fraudsters, its existing risk management system was inadvertently blocking a high proportion of legitimate shoppers. As a result, risk refusal rates had climbed to 12%.
Westwing needed a solution that was able to differentiate between fraudsters and legitimate shoppers, so it could recognize and block bad transactions while letting good ones through unhindered.
Our integrated risk management solution RevenueProtect was able to help. Its advanced feature ShopperDNA, enabled Westwing to identify the shopper behind each transaction in real-time, meaning the risk settings could be adjusted to target fraudsters only. And the Risk Engine automated the evaluation of each transaction, reducing manual review times by 30%.
“Adyen has been an excellent partner in our work to combat fraud. Together we have developed a robust risk management strategy tailored to our business, that has driven real business results.” - Shejn Tahirsylaj, Senior Payment & Project Manager at Westwing
Just four years after launching its online store in Germany in 2011, Westwing Home & Living has grown to become a market leader in 15 markets worldwide, including Russia and Brazil.
As well as leading in creativity and style expertise, Westwing is a data-focused, technically oriented business.
Its strategy is underpinned by extensive customer knowledge and a clear understanding of the central role its payments operation plays in its ongoing expansion.
With our robust core technology and driven by data, Westwing chose us as their payment provider.
We’ve been working together since Westwing launched, and we process the company’s payments across 12 markets.
Westwing’s growing international success, greater visibility, and rise in transaction value had made it a target for fraudsters.
Although the company already had an effective fraud prevention system in place, the challenge was that, in blocking fraudulent transactions, it was inadvertently blocking a proportion of legitimate shoppers (known as false positives).
Without detailed insight into who the fraudsters were, it was hard to distinguish between the two. As a result, risk refusal rates had climbed to 12%.
Westwing needed a solution that was able to differentiate between fraudsters and legitimate shoppers, thereby bringing down overall risk refusal rates, without increasing fraud.
The solution came with our built-in risk management solution, RevenueProtect.
Thanks to our unique position as an acquirer and a payment processor, RevenueProtect was able to take in a wide-breadth of data from the card schemes to discern the risk level of each transaction.
This data was then used alongside advanced algorithms, and criteria specific to Westwing’s business model, to target and prevent fraudsters without blocking the company’s legitimate customers.
The keystone of RevenueProtect is ShopperDNA, a dynamic transaction-linking algorithm which enabled Westwing to track fraudsters across devices, networks, and online personas.
Using advanced device fingerprinting and user-attribute linking, this system was able to give a holistic view of the behavior of both fraudsters and the company’s most loyal customers.
Using this system, Westwing was able to automate the identification of fraudsters in real-time and stop them in their tracks, while allowing genuine shoppers through.
“ShopperDNA has transformed risk management for us. The ability to view shoppers in real-time has enabled us to fight fraud without blocking our genuine customers. As a result, our risk refusal rates are down to 0.2%, which means that the overall risk refusals were reduced by approx. 98%” - Shejn Tahirsylaj
A bonus outcome of implementing RevenueProtect was the time Westwing saved on manual reviews.
Previously the company manually reviewed all international transactions on a daily basis. With the RevenueProtect Risk Engine, this was no longer necessary.
By using a combination of machine learning and pre-set criteria the Risk Engine dynamically identifies ‘high-risk’ transactions that require manual review, while letting ‘low-risk’ transactions proceed without the need for further verification.
“The Risk Engine brought automation to a previously manual process and saved us a great deal of time. As a result, our manual reviews are down by 30%. What’s more, we still have complete control over the system, meaning we are truly in the driving seat of our risk management.” - Shejn Tahirsylaj
With this information, Westwing implemented a system where it redirects a returning shopper, with an expired card, to the payment selection step in the checkout, so they can enter a valid credit card.
In other cases, Westwing generates specific error messages, highlighting the reason for the refusal in order to reduce the number of subsequent refusals.
“Understanding why a credit card transaction is declined is paramount to solving the problem, and, thanks to Adyen’s detailed insights, we can now follow up with customers to ensure their card details are up to date. Just weeks after launching this new initiative, we have already seen a significant drop of 24% across the bank refusal rates.” - Shejn Tahirsylaj
With Adyen, strategic risk management forms an integral part of the payment chain. Using real-time data to automate the bulk of risk mitigation has helped to increase Westwing’s revenue and will continue to support its further growth.
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