Riskified Technology Intelligence

What is Riskified?

Riskified is an e-commerce fraud prevention and chargeback guarantee platform that uses machine learning to approve more legitimate orders while blocking fraudulent transactions. Founded in 2013 in Tel Aviv by Eido Gal and Assaf Feldman, Riskified has grown to protect billions of dollars in transactions for major retailers including Prada, Wish, and Wayfair. The company went public on the NYSE in 2021.

Unlike traditional fraud prevention that relies on rigid rules and results in high false positive rates, Riskified's approach uses behavioral analytics and machine learning trained on billions of transactions to make nuanced decisions. The platform analyzes hundreds of data points including device fingerprinting, behavioral biometrics, proxy detection, and social network analysis to distinguish legitimate customers from fraudsters.

What sets Riskified apart is its chargeback guarantee model. For transactions that Riskified approves, the company assumes liability for fraud chargebacks. If an approved order turns out to be fraudulent, Riskified reimburses the merchant. This risk transfer model aligns incentives and gives merchants confidence to approve more orders, particularly in high-risk categories like electronics, luxury goods, and international orders.

The platform integrates with major e-commerce platforms including Shopify, Magento, Salesforce Commerce Cloud, and custom implementations via API. Real-time decisions are returned in milliseconds, enabling seamless checkout experiences without adding friction for legitimate customers. Post-authorization review can recover additional orders initially flagged for manual review.

Detection of Riskified on an e-commerce website indicates a sophisticated approach to fraud prevention with a focus on maximizing revenue while minimizing fraud losses. Organizations using Riskified typically operate at scale, sell products attractive to fraudsters, or have experienced significant fraud losses that justify investment in advanced protection.

Riskified Platform Features

Machine Learning Fraud Detection: Riskified's core technology uses machine learning models trained on billions of transactions across its merchant network. Models continuously learn from new fraud patterns and adapt to evolving threats. Behavioral analysis examines how users interact with sites, not just what data they submit. This approach catches sophisticated fraud that rules-based systems miss while reducing false declines.

Chargeback Guarantee: For every transaction Riskified approves, the company provides a chargeback guarantee. If an approved order results in a fraud chargeback, Riskified reimburses the merchant for the full order value. This risk transfer model eliminates the financial uncertainty of fraud. Merchants can approve more orders confidently knowing they're protected.

Device Fingerprinting: Advanced device identification tracks devices across sessions and merchants. Fraudsters reusing devices are identified even with new accounts. Browser attributes, plugins, and configuration create unique fingerprints. Device reputation from the Riskified network identifies known fraudster devices.

Behavioral Biometrics: Analysis of how users type, move their mouse, and navigate pages reveals bot activity and account takeover. Legitimate customer behavior patterns differ measurably from fraudulent patterns. This passive analysis adds no friction to the checkout experience. Behavioral signals are particularly effective against sophisticated fraud.

Network Analysis: Connections between orders, devices, accounts, and payment methods reveal fraud rings. Graph analysis identifies patterns across seemingly unrelated transactions. The collective intelligence from all Riskified merchants improves detection for everyone. Network effects make the platform more effective as it processes more transactions.

Policy Abuse Protection: Beyond payment fraud, Riskified identifies abuse of return policies, promotions, and loyalty programs. Reseller detection prevents buying for unauthorized resale. Promotion abuse identification catches customers exploiting coupon codes. This broader protection addresses multiple forms of revenue leakage.

Riskified Use Cases

High-Value Product Protection: Retailers selling electronics, luxury goods, jewelry, and other high-value items face elevated fraud risk. Fraudsters target these products for resale value. Riskified's sophisticated detection identifies fraud patterns specific to these categories. The chargeback guarantee provides financial protection for approved high-value orders.

International Expansion: Cross-border e-commerce carries higher fraud risk due to unfamiliar customer patterns and limited data. Many merchants decline international orders or impose excessive friction. Riskified's global data enables confident approval of legitimate international customers. Expansion into new markets becomes less risky with fraud protection in place.

False Decline Recovery: Many merchants decline legitimate orders due to overly cautious fraud rules. These false declines represent lost revenue and damaged customer relationships. Riskified's accuracy enables approving orders that would otherwise be declined. Recovery of just a few percentage points in false declines often exceeds the cost of the service.

Account Takeover Prevention: Fraudsters increasingly target existing customer accounts rather than creating new ones. Stolen credentials from data breaches enable account takeover attacks. Riskified detects behavioral anomalies indicating account compromise. Protection extends beyond checkout to login and account changes.

Flash Sale and High-Volume Events: Sales events attract both legitimate customers and fraudsters in high volumes. Manual review cannot keep pace during peak periods. Riskified's real-time automated decisions scale to handle any volume. Merchants can run promotions confidently without fraud concerns.

Subscription and Digital Goods: Recurring billing and instant digital delivery create specific fraud challenges. Card testing on subscription signups is common. Digital goods have no shipping address to verify. Riskified's models address these category-specific fraud patterns with tailored detection approaches.

Riskified Integration Examples

JavaScript Beacon

<!-- Riskified Beacon - Add to all pages -->
<script type="text/javascript">
(function() {
    function riskifiedBeaconLoad() {
        var store_domain = 'YOUR_STORE_DOMAIN';
        var session_id = 'UNIQUE_SESSION_ID';
        var url = ('https:' == document.location.protocol ? 'https://' : 'http://')
            + 'beacon.riskified.com?shop=' + store_domain + '&sid=' + session_id;
        var s = document.createElement('script');
        s.type = 'text/javascript';
        s.async = true;
        s.src = url;
        var x = document.getElementsByTagName('script')[0];
        x.parentNode.insertBefore(s, x);
    }
    if (window.attachEvent) {
        window.attachEvent('onload', riskifiedBeaconLoad);
    } else {
        window.addEventListener('load', riskifiedBeaconLoad, false);
    }
})();
</script>

Order Submission API

# Python - Submit order for decision
import requests

order_data = {
    "order": {
        "id": "ORDER-12345",
        "email": "[email protected]",
        "created_at": "2024-01-15T14:30:00Z",
        "currency": "USD",
        "gateway": "stripe",
        "total_price": 299.99,
        "cart_token": "CART_TOKEN",
        "line_items": [{
            "title": "Wireless Headphones",
            "price": 299.99,
            "quantity": 1,
            "sku": "WH-1000"
        }],
        "shipping_address": {
            "first_name": "John",
            "last_name": "Doe",
            "address1": "123 Main St",
            "city": "New York",
            "province": "NY",
            "zip": "10001",
            "country": "US"
        },
        "billing_address": {
            "first_name": "John",
            "last_name": "Doe",
            "address1": "123 Main St",
            "city": "New York",
            "province": "NY",
            "zip": "10001",
            "country": "US"
        },
        "customer": {
            "email": "[email protected]",
            "first_name": "John",
            "last_name": "Doe"
        }
    }
}

response = requests.post(
    "https://api.riskified.com/api/decide",
    json=order_data,
    headers={
        "X-RISKIFIED-SHOP-DOMAIN": "your-store.com",
        "X-RISKIFIED-HMAC-SHA256": "CALCULATED_SIGNATURE"
    }
)

Decision Response Handling

// Handle Riskified decision response
const handleDecision = (response) => {
    const { status, description, order_id } = response.order;

    switch(status) {
        case 'approved':
            // Process the order
            fulfillOrder(order_id);
            break;
        case 'declined':
            // Cancel the order, refund if needed
            cancelOrder(order_id, description);
            break;
        case 'pending':
            // Hold for manual review
            queueForReview(order_id);
            break;
    }
};

Why Merchants Choose Riskified

Chargeback Guarantee: The financial guarantee fundamentally changes the fraud prevention equation. Merchants know exactly what they'll pay (Riskified's fee) rather than uncertain fraud losses. Approved orders that result in chargebacks are fully reimbursed. This certainty enables confident business planning and growth.

Revenue Optimization: By reducing false declines, Riskified often pays for itself through recovered revenue. Legitimate customers previously declined can now complete purchases. International orders that would be blocked can be approved with confidence. The focus is on maximizing revenue, not just minimizing fraud.

Machine Learning Accuracy: Models trained on billions of transactions achieve accuracy impossible with rules-based systems. Continuous learning adapts to new fraud patterns automatically. The network effect improves detection as more merchants join. This sophistication catches fraud that other solutions miss.

Frictionless Customer Experience: Unlike solutions requiring additional verification steps, Riskified works invisibly. Legitimate customers experience no added friction. Decisions are returned in milliseconds, not holding up checkout. Customer satisfaction improves alongside fraud protection.

Comprehensive Protection: Beyond payment fraud, Riskified addresses policy abuse, account takeover, and promotion fraud. Multiple fraud types are addressed through a single integration. This comprehensive approach simplifies the fraud prevention stack.

Scalability: Real-time decisions scale to handle flash sales and peak seasons. No manual review bottlenecks during high-volume periods. Infrastructure handles transaction volumes of the largest retailers. Growth doesn't require proportional increases in fraud operations staff.

Proven at Scale: Major retailers including Wayfair, Wish, and Prada trust Riskified. Billions of dollars in transactions processed annually. NYSE-listed public company with transparent financials. Enterprise-grade security and compliance certifications.