Riskified’s New Solution Minimizes Customer Friction and Prevents Potential Cart Abandonment Issues Introduced by PSD2
Riskified, the payments and fraud-prevention solution provider announced that Air Europa, the airline division of Globalia, has chosen Riskified PSD2 Optimization to allow the airline to maintain a frictionless booking experience and maximize revenue under the EU’s new PSD2 regulation. Riskified data shows that European merchants could miss out on up to 15 percent of their revenue if they do not proactively address the regulation.
“PSD2’s consumer protections address a real need in the market, but their implementation is likely to impact the customer experience at all e-commerce sites”
The PSD2 directive requires many online shoppers to undergo a more rigorous authentication process, Strong Customer Authentication (SCA) when buying online to reduce fraud. SCA is expected to dramatically reduce conversion rates for merchants. However, some transactions can be exempted from SCA and, instead, undergo a friction-free verification, Transaction Risk Analysis (TRA). TRA provides consumers with a better shopping experience that prevents SCA-associated cart abandonment. As a result, merchants that maximize their use of TRA will protect their eCommerce revenues and brand reputation.
Riskified PSD2 Optimization leverages machine learning to significantly increase the percentage of orders that undergo TRA. Moreover, PSD2 Optimization collects data from Riskified’s merchant network, providing insight into issuers and acquirers performance under the regulation. Using this product, Air Europa expects to capture £7-£12 million of revenue that would have otherwise been lost to SCA-related cart abandonment within the first year of PSD2 coming into force.
“PSD2’s consumer protections address a real need in the market, but their implementation is likely to impact the customer experience at all e-commerce sites,” said Yago Casasnovas, payments & fraud prevention manager at Air Europa. “Riskified PSD2 Optimization enables us to fully comply with the regulation while continuing to provide our customers a safe, satisfying booking experience with minimal friction.”
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Since 2017, Air Europa has used Riskified’s chargeback-guarantee fraud-prevention solution to increase approved transactions and reduce costs. In that time, Riskified has succeeded in lifting Air Europa’s order approval rate by 10 percent and reducing chargebacks by 95 percent. The company is among the first merchants to integrate Riskified PSD2 Optimization.
“Air Europa is a tech-savvy company, and customer satisfaction is a major priority. By using Riskified PSD2 Optimization, the airline will ensure they maximize their customer experience while complying with the new regulation,” said Assaf Feldman, co-founder and CTO, Riskified. “Our solution allows Air Europa to capture as much revenue as possible under PSD2.”
Riskified PSD2 Optimization is the latest in a suite of AI-based solutions designed to help merchants keep legitimate customers moving along the path to purchase while avoiding customer friction, cart abandonment, and other causes of unnecessary dropoff.