Merchant Metrics for Fraud-Free and Safer eCom Payment Methods with Yitz Mendlowitz of PAAY

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Yitz Mendlowitz, Cofounder and CEO of PAAY, jumped onto the eCom Ops Podcast to share how he dove into devising merchant metrics for secure eCom payments, how to prevent fraud through high authentication and tips for eCom merchants. 

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Key Facts

  • Yitz’s LinkedIn
  • PAAY’s website
  • PPAAY provides e-commerce merchants a consumer authentication service to secure online payments, reduce fraudulent chargebacks, and increase authorisation rates
  • PAAY provides a chargeback liability shift on up to 90% of transactions
  • PAAY increases card-not-present approval rates by up to 11%

Key Takeaways

    • PAAY is a leading innovative consumer authentication service for merchants that is simple, secure, and easy to implement. PAAY’s solutions empower e-commerce merchants to grow their business securely by increasing authorization rates and eliminating friendly fraud while meeting network security and compliance needs
    • Yitz belongs to a finance background where he mostly dealt with mortgages. He got into payments because he loves online shopping but didn’t like the checkout process. This gave him an idea to develop an application to make the checkout process frictionless
    • Based on the checkout pain point, Yitz came up with PAAY. Initially, it was a plug-in for merchants to accept payments with a phone number. Consumers would enter their phone numbers online and receive a push notification to their phones to confirm payment
    • Yitz learned more about eCommerce merchants and their pain points related to card-not-present rules, leading to fraud liability and authorization. At that point Yitz decided to pivot from being a plugin for checking out online and to focus on building a SaaS solution for payment authentication and security
    • Card-present transactions are low risk, and have high authorization rates. Additionally, the card issuers are liable for fraud (not the merchant) and merchants only pay the lowest interchange or processing fee. On the other hand, when it comes to card-not-present transactions, there is a much higher risk of fraud, and result in a low authorization rate.
    • Friendly fraud is very common in eCom. It is when someone buys a product online and later claims they never authorized it and he/she demands the reversal of a legitimate transaction
      eCommerce merchants face high chargebacks of up to 20-30% due to friendly fraud which can lead them to potential lose their merchant accounts

    Benefits of using PAAY

    • Reduces merchant liability in friendly fraud
    • Reduces chargebacks and increases authorizations
    • Provides online merchants with “Strong Customer Authentication” which is required in the EEA under PSD2 (Payment Service Directive 2).
    • Yitz suggests eCom merchants add PAAY soon after establishing their website as it uses a 3-D secure protocol created by card brands. It can be incorporated despite existing paying methods as PAAY is platform-agnostic solution
    • Unlike brick and mortar merchants, eCommerce merchants spend millions of dollars on fraud prevention. Yitz stresses proper payment methods to be the most important aspect of any business as it hurts both the top and bottom line
    • Yitz gives three pieces of advice to eCommerce merchants:
      • Secure your merchant account to keep your chargeback rates down
      • Apply robust fraud prevention tools
      • Establish customer service with a humanistic element
    • Yitz’s advice to eCommerce businesses is to focus on customer service. Nowadays, eCom companies are as busy as ever, and customer service goes a long way

    Key Resources

    Yitz’s biggest influences

    Yitz’s biggest influence to run an eCom platform like PAAY is his customers! He elaborates on how he learned from different card brands. Nevertheless, major contributions came from interactions with his customers as they give very keen insight into their businesses which serves as a major source of Yitz’s knowledge.

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