Fight fraud frugally
By Stephanie Yee /
26 Jun 2013
At Sift Science, we’re developing an advanced machine learning system that is revolutionizing how e-commerce businesses protect themselves from cybercrime. We believe that all merchants should have access to the same class of technology used by Google and Amazon to prevent e-commerce fraud.
Today, we’re delighted to announce new prices, which make Sift Science’s simple and effective fraud detection free for 95% of e-commerce merchants and less than one penny per transaction for the others.
The costs of fraud are high. The price to prevent it shouldn’t be.
With fraud, everyone loses… except fraudsters
In the US, e-commerce fraud cost the industry $3.5 billion in 2012 (0.9% of all revenue).1
Three things you can do with $3.5 billion:
- Buy an Audi A3 for each resident of Ann Arbor, Michigan.2
- Become the 4th largest owner of Facebook (~6% stake).4
- Fix the 2013 budget deficits of 11 states and the District of Columbia.3
Two reasons 0.9% is unacceptably high:
- At 0.9%, the e-commerce fraud loss rate is an eighth of the industry’s average profit margin (6.8%).5 Without e-commerce fraud, industry profits would be ~13% higher.
- Businesses would have reinvested those profits in ways that help their customers and the economy, such as offering lower prices or hiring more employees.
It’s infuriating that fraudsters hurt the online economy so much. Merchants face chargebacks, lose reputation, and devote resources to their worst customers. Shoppers pay higher prices, get frustrated by lengthy checkout pages, and wait longer for their orders to be delivered. Finally, payments companies see their networks shrink as fraudsters drive merchants into excessive chargeback inferno.
Sift Science: now free for 95% of all e-commerce businesses
At Sift Science, we’re building a product that make it easy for everyone to detect fraud. Although we serve businesses, our prices are not that of a traditional ‘enterprise’ company.
Yes, you read that right. Every month, the first 10,000 transactions are free. Ninety-five percent of e-commerce businesses can now use our innovative machine learning product, completely free. A higher-volume business pays a bit more — our team needs to eat, after all — but the average cost per transaction will always be one penny or less.
We’re betting that Sift Science clients — with more efficient fraud-prevention teams, fewer chargebacks, and negligible third-party-tool costs — will reinvest their savings and experience incredible growth. And we’ll grow with them.
Thanks for reading, and have a great day!
Sources:1 Cybersource 2013 2 An Audi A3 costs $27,270 (Edmunds). Ann Arbor’s population was 116,121 (US Census, 2012) 3 Math based on the Kaiser Family Foundation’s State Budget Shortfalls SFY2013 4 FB market cap as of 6/20/201, ownership stake based on http://whoownsfacebook.com 5 IBIS world, cited by Inc.com