News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Digital River Puts Wealth of E-Commerce Experience to Work

Between operating thousands of e-commerce sites globally—many for top brands including Microsoft, Adobe, Electronic Arts and Kodak—and as a pioneer in selling digital software products online, Minnesota-based Digital River, Inc. has access to a wealth of data and knowledge. As the company has expanded organically, via acquisitions and by adding clients, it is leveraging that trove of data to extend its payment and fraud prevention services through its new World Payments solution, and has made them available to online merchants on a standalone basis.

Optimizing Payments Pages

According to Paul Bridgewater, vice president of World Payments, the payments experience of managing tens of thousands Web stores around the world has enabled Digital River to understand, “based upon the demographic of the consumer and the types of products being sold by merchants, what payment options matter and how those payment options should be formatted and presented to consumers in the checkout experience.”

Bridgewater notes the knowledge accrued operating e-commerce sites since its launch in 1994 has provided the company the basis to develop template payment pages that merchants can experiment with to find the ones that are most effective. The templates, which are deployed by the merchants themselves in the World Payments command console, represent Digital River’s own “best practices” for payments pages on their e-commerce sites.

“We offer selected template designs to clients based on what we’ve seen with regard to demographics of consumers and what types of products we’re selling in those markets,” Bridgewater says. “We offer that as a best practice.”

Clients also can test among multiple templates so they can gauge their performance and use the best for their site, Bridgewater notes. They can test for variables like different payment options and how the payment options are presented to the consumer during their experience.

“They can deploy two payment pages and they can set up an optimizing test within the command console,” he says. “They can make a decision on how much of the traffic goes to each page and can then profile in real-time how those payment pages are actually converting based upon the traffic that’s coming through.”

Bridgewater says Digital River’s payment programs are all designed to grow revenue.

“Cost optimization becomes less important if you are showing incremental revenue growth on the payment page,” he says.

Fighting Fraud with Deluge of Data

Digital River also leveraged its experience as an e-commerce merchant and outsourcing company when it recently offered its anti-fraud solution as a standalone service. The company created Transaction Defender in an effort to solve its own problems that cropped up as an online merchant.

Bridgewater says the technology incorporated in the product has been developed over the past decade as Digital River has worked with online merchants on a global basis.

“We weren’t able to go out and purchase anti-fraud products from companies because we really are the pioneers of digitally delivered software within the industry,” Bridgewater explains. “There just wasn’t anybody doing it at the time.”

He notes the mountains of data generated by the Web stores Digital River manages and the nearly 30 e-commerce companies it has acquired outright led to the development of several patented technologies that comprise the anti-fraud tool—a tool Bridgewater says is highly effective at making good decisions on potentially fraudulent transactions while not turning away good orders.

“Since we rolled out Transaction Defender across all our e-commerce properties over the last six to eight months and we’re now fully deployed over all out platforms, we’ve seen on average between 3 and 6 percent lift in revenue without any impact to chargeback rates.”

Not only does Digital River’s access to a huge agglomeration of data enable quick decisioning, it also gets the tool most of the way there before it ever sees consumer entered information.

“We’re typically 70 percent of the way to a decision on whether we’re going to accept an order before a consumer enters any personally identifiable information into the checkout,” he says.

While Bridgewater is loath to discuss the proprietary technologies that make the tool effective, he points out that it includes proxy piercing technology to identify the true location of an order’s origination and dynamic link analysis to help sift through Digital River’s “community database” culled from the tens of thousands of e-commerce sites it runs.

According to Bridgewater, the database is a competitive advantage and he is dubious about claims by some companies that they are building collaborative communities that share data.

“Companies like Ethoca are talking about community databases. The problem they have is they don’t have any data,” he says. “There is no community data available to them because companies don’t want to provide that data. We’ve got that database ourselves because we’re already an expansive global merchant.”

Digital River adds to that database by requiring clients that make a decision or use information about fraudulent activity provided by Transaction Defender to tell Digital River the outcome of the transaction: did they accept, decline or accept and see a chargeback.

“That way we can continue to tune our database so it continues to grow and adds continued validity into the market,” he explains.

So, whether it is optimizing payments pages or rooting out fraud in online transactions, Digital River is putting its experience as one of the first companies to market digital products on the Web to work.

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Daniel Leibovitch