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Bolt: An End-To-End Payments Stack with Zero Fraud

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Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#111

Post by amcnett »

rbres wrote: post #87
amcnett wrote: post #81

Fraud liability absorbed by a service provider isn't "zero fraud." It is: "you don't get charged directly for chargebacks and other financial penalties, but your brand is still at risk, plus you have no control over false positives."

True. But it's zero fraud from your perspective as a business. You also have full control over false positives: - First, we put txn's through several layers to ensure the highest rates of order approvals. If our algorithm is about to reject, it goes through a human review process to ensure we're approving as much as possible. - If we reject, you have a force approve time window to approve transactions if you disagree…

Sure, maybe you offer "zero fraud" from a chargebacks-line-item-on-the-balance-sheet perspective. The impacts of fraud on customers' perception of a company, and the effects those perceptions will have on the bottom line, however, can be significant. This is not say I assume your service is deficient in any way...the marketing is just a little snicker-inducing from someone like me who works in the field. The only sure way to have zero fraud is to turn off sales.

Final control over force-approving rejected transactions is a nice feature on its face. I understand why your merchants don't use it...they'd have to soak the expense of paying someone to monitor accepts and rejects in an attempt to optimize sales (which is what they are paying you to do).

If a merchant does not have full visibility into and control of their anti-fraud program (and the expertise to know what to do with it) approval/reject/false positive rates are always going to be in the hands of people who don't know their customers or business as well as the merchant does. That is why larger, mature businesses invest in anti-fraud people and technology. That's certainly a bridge too far for the typical small business, so services like Bolt can certainly deliver a ton of value. I just advise a merchant who thinks that just because they can't see fraud there isn't any impact to their business that they're missing a potentially crucial part of the picture.

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#112

Post by thenanyu »

rbres wrote: post #59
brod wrote: post #56

Since there's no demo's I had a look at a couple case studies.. https://i.imgur.com/TBTF63h.png https://i.imgur.com/HP0DNNg.png It looks / feels like stripe but without the brand recognition, I'd hope it's more cost effective than competitors but having to contact them for pricing doesn't inspire confidence. I also don't see how this is any more frictionless than competitors. On the flip side I'm a little blown away…

Thanks brod! Main differences: - Stripe = APIs to build your own payment stack. - Bolt = fully out of the box payments stack. Checkout that doesn't only do payments but also shipping/tax/user-auth. Also w/ 100% fraud coverage. Also to set the record a bit more clearly: we launched in stealth 1.5 years ago, have been moving $100Ms, and have dozens of case studies. Appreciate the kind words too!

Do you deal with international duties and tax as well?

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#113

Post by thephyber »

si1entstill wrote: post #58
rbres wrote: post #4

Earlier quoted context omitted.

CEO of Bolt here. We'll be writing more about this in the future. In short, our fraud detection is really really good (although not perfect). However, the fraud that ends up making it through the pipeline is so minimal that we cover it fully. So, for a small fee as an online business you never have to pay for / deal with fraudulent chargebacks again. There are other companies that do this, but none of them also do pa…

Looking at the docs ( https://docs.bolt.com/v1/docs/step-2-load-bolt-checkout ) it instructs the reader: "The onSuccess method will be called when Bolt successfully processes a transaction. This can be used as a way to create the order (...)". This opens up a massive security hole if the merchant is making decisions based on this method being called client-side, right? What prevents a malicious actor from calling tha…

> This opens up a massive security hole

Have you considered that discussing API design decisions regarding security in a public forum is a bad decision of your own?

After literally 10 seconds on the site, I found this: https://bolt.com/security

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#114

Post by jv22222 »

kodablah wrote: post #7

Why do companies choose not to be 100% transparent? Any time I have to contact a company to see more or a demo or, even worse, see pricing, I close the page and make a mental note to never work with them in any capacity. I feel this type of boycotting is the only way to change the practice. I mean, you even hide your docs behind a password? How terrible. What are you keeping so secret? Does this translate to your oth…

I always wonder why so many people don't respond to critical comments in the way that rbres has here.

It's such a great opportunity to show what your company is all about and win over skeptics.

Nice work rbres!

Now, let's do an interview with you on http://techzinglive.com because it sounds like you have a great story!

Send email to podcast[at]techzinglive.com if you're up for it ;)

p.s Thanks skrebbel for digging into that.

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#116

Post by dawhizkid »

Consumer identity fraud isn't the only type of fraud problem that needs to be solved from the payment processor POV - there's also friendly fraud (when the customer is actually the owner of the credit card but claims fraud anyway), merchant fraud (merchants setting up bad sites and trying to steal funds), and collusion between merchant and customer.

It seems like Bolt is focused on solving the consumer identity fraud problem for merchants, but this biz models will 100% make them a huge target for fraudulent merchants to collude with customers to steal funds.

I guess I don't see how even an additional low single digit % fee will make up for false negatives. Assuming the company keeps .5% of the standard payment processing fee + takes an additional ~3% in fees on top of that, a $1000 false negative would require $1000/(.035) = ~$28.5k in additional processing volume to breakeven. This doesn't even take into the account the fact Bolt will eat the chargeback fee passed on from the network, so merchants with high volume/low average order value (think digital goods) will be hugely expensive for Bolt to service given they're making pennies per transaction but potentially paying 10x+ that per chargeback.

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#117

Post by thephyber »

huhtenberg wrote: post #40
rbres wrote: post #4

Earlier quoted context omitted.

CEO of Bolt here. We'll be writing more about this in the future. In short, our fraud detection is really really good (although not perfect). However, the fraud that ends up making it through the pipeline is so minimal that we cover it fully. So, for a small fee as an online business you never have to pay for / deal with fraudulent chargebacks again. There are other companies that do this, but none of them also do pa…

Say, I got myself a credit card number of someone from Toronto, Canada and I am checking out through your system using a botnet-based Toronto exit node. Similar scenario, but this time I am an actual owner of that Canadian credit card, but I'm using Tor (or VPN) with an exit in Romania. Can you elaborate how your 200+ variables will be able to block first and allow second purchase?

> Can you elaborate how your 200+ variables will be able to block first and allow second purchase

A Bolt employee already replied[1] with a section about false positives vs. false negatives.

I can't imagine any legitimate financial industry company cares much about supporting Tor users. If your financial accounts are based in Canada but your IP traffic appears to be coming from Romania (whether through Tor or VPN or other similar reasons), you probably are much more likely to be involved in fraud from their perspective.

If you have Canadian accounts and are travelling in Romania, that's a different story.

[1] https://news.ycombinator.com/item?id=16217020

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#118

Post by rbres »

dawhizkid wrote: post #116

Consumer identity fraud isn't the only type of fraud problem that needs to be solved from the payment processor POV - there's also friendly fraud (when the customer is actually the owner of the credit card but claims fraud anyway), merchant fraud (merchants setting up bad sites and trying to steal funds), and collusion between merchant and customer. It seems like Bolt is focused on solving the consumer identity fraud…

Hey dawhizkid - totally right.

Some comments on that in this thread:

https://news.ycombinator.com/item?id=16216682

https://news.ycombinator.com/item?id=16216936

We vet our merchants before onboarding and make sure to work with high-integrity companies. We monitor orders not just for identity fraud, but for merchant / collusion fraud.

That being said, we can certainly make mistakes. We also end up in the red some months with some clients. The good thing is that when we make a mistake, we pay the cost, not the merchant (which is contrary to the current state of the industry).

We have made reasonable profit per client even with our costs, but the real winners are our clients driving millions in newfound revenue.

Re: Bolt: An End-To-End Payments Stack with Zero Fraud

#119

Post by dawhizkid »

rbres wrote: post #118
dawhizkid wrote: post #116

Consumer identity fraud isn't the only type of fraud problem that needs to be solved from the payment processor POV - there's also friendly fraud (when the customer is actually the owner of the credit card but claims fraud anyway), merchant fraud (merchants setting up bad sites and trying to steal funds), and collusion between merchant and customer. It seems like Bolt is focused on solving the consumer identity fraud…

Hey dawhizkid - totally right. Some comments on that in this thread: https://news.ycombinator.com/item?id=16216682 https://news.ycombinator.com/item?id=16216936 We vet our merchants before onboarding and make sure to work with high-integrity companies. We monitor orders not just for identity fraud, but for merchant / collusion fraud. That being said, we can certainly make mistakes. We also end up in the red some mont…

What's the source of truth for deciding whether it was friendly fraud or not? Is it the chargeback reason code?

As far I know there isn't a specific reason code for "friendly fraud" (i.e. banks are passing along chargebacks telling you as a merchant that they think it's not actual fraud) and more often than not, especially having worked on this problem at scale in the past, friendly fraud chargebacks just come back with a "this is fraud" reason code.

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