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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

#71

Post by rbres »

ikeboy wrote: post #38
goldenkey wrote: post #13

Earlier quoted context omitted.

See the fine print too. They have tiered service. I don't know why they are advertising their super plan on the front page as if its their whole offering... "If you have Bolt's fraud indemnification, Bolt will fully cover the costs of and manage fraud-related chargebacks. But, you will still be responsible for Merchant-related chargebacks (damaged goods, goods not received, unhappy customers, etc.)" "If you do not ha…

So someone falsely claiming order not received is not covered. You don't cover friendly fraud.

Right now, we don't cover friendly fraud. The reason is that it's largely out of our control. We can't control how well merchants communicate with clients, how fast/reliably they ship, etc. So if we covered it, it lowers the cost of treating customers poorly. There will always be a bad actor here or there, but that's typically less than 1% of chargebacks (at least from our data).

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

#72

Post by jrochkind1 »

rbres wrote: post #62
jrochkind1 wrote: post #54

So my question would be how many legitimate customers do they reject as fraud (false positives) in order to eliminate false negatives? :)

It's pretty insane. Empirically, you'd rather let several fraudsters through in order to not trap a good customer (because of their customer lifetime value, brand value, etc). However, the industry does the opposite. They'll reject 3 good customers to catch 1 fraudster. It's really bad. Every switch to Bolt has seen a 1%-20% lift in order approval rates (while guaranteeing zero fraud) because of our unique data engin…

So you're saying despite having better fraud detection, your false positive rates (orders that would have been non-fraudulent but rejected anyway) are _also_ lower than the competition?

This is definitely something you might want to put in your marketting, but also back up in some way.

As a general rule, I'm going to assume any reduction in false negatives has some increase in false positives. If the general rule is not true in your case, I'm going to need to be convinced. :)

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

#73

Post by huhtenberg »

jebeng wrote: post #53
huhtenberg wrote: post #40

Earlier quoted context omitted.

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?

I don't think this is the type of thing they can really elaborate on for obvious reasons. But the genuine holder is probably going to be blocked when they start throwing flags like that, and that's probably just standard everywhere with any type of automated fraud protection.

Well, it's a pretty basic question.

In both cases the vast majority of their 200 variables will look the same. The only differences will be in the IP and latency data and, possibly, the time zone/locale information if a fraudster is not being careful.

Point being is that differentiating these two cases comes down to analyzing just few bits of data, so I'm not sure why they are using "200 points" as a selling point.

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

#74

Post by huhtenberg »

numbsafari wrote: post #50
huhtenberg wrote: post #40

Earlier quoted context omitted.

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?

You mean if you aren’t automatically blocked because you are coming from a TOR exit node and that user has never done that before?

I can't parse your question, sorry.

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

#75

Post by rbres »

tyfon wrote: post #25
rbres wrote: post #15

Earlier quoted context omitted.

We recently rolled all clients to the full offering. A couple legacy clients don't have the 100% fraud coverage, thus keeping it in the terms. But if you sign up with Bolt from this point forward, it bakes in the 100% fraud indemnification. Will probably even take that out of the terms soon.

So what percent of the transaction number is flagged as fraud, and how many is actual fraud? Losing a customer that is not fraudulent due to aggressive filtering is almost as bad as having a fraudulent one.

Good question. Addressed that here: https://news.ycombinator.com/item?id=16216455

Our top focus is order approval lift. Zero fraud is cool and all (and makes for a good posting title) but is really just an assurance that you should be comfortable as we start to approve way more orders.

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

#76

Post by jrochkind1 »

IshKebab wrote: post #10

So it's not really zero fraud, Bolt just covers the cost of fraud.

That's effectively the same thing as zero fraud for anything that matters, if you never have to pay for it, no?

I mean, I guess if someone fraudulently signed up for a subscription, you'd lose the future expected monthly subscription fees or whatever.

But it's pretty much good enough. When I saw "zero fraud" advertised, my immediate assumption was that they paid for any fraud, and they were confident they had fraud low enough to do that and still be profitable. No other way to get truly "zero".

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

#77

Post by ikeboy »

rbres wrote: post #71
ikeboy wrote: post #38

Earlier quoted context omitted.

So someone falsely claiming order not received is not covered. You don't cover friendly fraud.

Right now, we don't cover friendly fraud. The reason is that it's largely out of our control. We can't control how well merchants communicate with clients, how fast/reliably they ship, etc. So if we covered it, it lowers the cost of treating customers poorly. There will always be a bad actor here or there, but that's typically less than 1% of chargebacks (at least from our data).

Wow, you're saying 99%+ of chargebacks are claiming not authorized? Would not have expected that.

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

#78

Post by tlb »

rbres wrote: post #30
sprite wrote: post #16

Earlier quoted context omitted.

If you can't provide specific pricing maybe give a few sample pricings with different scenarios so people can at least ballpark it before requesting a quote?

Sure. Our fee ranges anywhere from a fraction of a percent to a couple percentage points. Companies selling $100k diamond jewelry (of which we have several) vs companies selling $100 bikes have different levels of risk. Most importantly, we typically charge 1/10 the revenue we generate for our clients: https://bolt.com/case-studies . Everyone who's signed up is 10X ROI positive. For a small single digit percent they'…

Does that mean you charge 0.10 * (new_revenue - revenue_before_bolt) in addition to the fees? For a company that keeps growing, that would asymptotically approach 10%.

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

#79

Post by huhtenberg »

rbres wrote: post #68
huhtenberg wrote: post #40

Earlier quoted context omitted.

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?

Most fraud detection systems rely on blocking rules. So they'd detect a VPN/Tor and combined with an international order, it'd be an almost guaranteed block. We'd factor this in, and it may be negative, but if the other 198 variables match up, you'll be in good shape with Bolt given your purchase behavior, on-page event patters, order details, and many other factors that are much better predictors of fraud than VPN/C…

> other 198 variables match up

With what exactly? 198 variables will be the same between two cases I described.

The follow up question is what your false-positive rates are. As I said in another reply - there is a set of simple and common cases when both fraud and legit purchases look the same, so by having a zero fraud rate you will be driving the false-positive rate up - and that is bad. People won't be able to pay even though they are already with a wallet in hand.

This in turn means that merchants will need to implement a fallback option to cover this risk... which is going to be PayPal, probably.

All of this is why Stripe Radar implements _provisional_ blocking. They let purchases through, but flag them for a human review. I am going to make a bold prediction and say that you will converge to the same approach sooner rather later. There's no magic recipe.

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

#80

Post by rbres »

huhtenberg wrote: post #79
rbres wrote: post #68

Earlier quoted context omitted.

Most fraud detection systems rely on blocking rules. So they'd detect a VPN/Tor and combined with an international order, it'd be an almost guaranteed block. We'd factor this in, and it may be negative, but if the other 198 variables match up, you'll be in good shape with Bolt given your purchase behavior, on-page event patters, order details, and many other factors that are much better predictors of fraud than VPN/C…

> other 198 variables match up With what exactly? 198 variables will be the same between two cases I described. The follow up question is what your false-positive rates are. As I said in another reply - there is a set of simple and common cases when both fraud and legit purchases look the same, so by having a zero fraud rate you will be driving the false-positive rate up - and that is bad. People won't be able to pay…

We never auto-reject, and we already do human review. Forgot to mention that.

At the bottom of https://bolt.com/fraud

"MACHINE POWERED, HUMAN REVIEWED"

"Everything we do at Bolt is tailored to maximize your order approval rates. Purely algorithmic systems falsely reject good customers. Every suspicious order goes through an extra layer of human review to ensure the best results."

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