Already popular in North America and Europe, ChicMe – a Geeko Tech fashion brand – experienced rapid growth throughout 2022 in Latin American markets such as Mexico and Brazil. But with this rapid growth came a new and unique set of challenges. In ChicMe’s case, payment and risk control processes faced obstacles in these emerging markets, with fraudulent transactions taking a toll on profit margins, banking channels and even threatening future expansion plans.
Fortunately, ChicMe teamed up with Forter, capitalizing on our global merchant data network, expertise in identity, and fully automated fraud decision-making process. This strategic move led to quick results, allowing them to tackle fraudulent activities in real-time and improve customer experience — ultimately fueling further expansion and revenue growth.
Li Feng, Chief Technology Officer at Geeko Tech, shares more about the challenges ChicMe encountered, why they chose Forter’s Trust Platform, and the boost in revenue and approvals the company has seen since implementation.
How was ChicMe solving fraud challenges before partnering with Forter?
Before partnering with Forter, we were not working with another vendor and instead had in-house fraud teams and procedures to authorize payments. After experiencing an increase in fraudulent transactions, particularly in Latin America, and as we continued to expand our operations globally, we realized we needed a scalable solution that blocked fraud without introducing friction in the buying process.
Why did ChicMe ultimately choose Forter?
Forter’s platform is 100% automated, which was important to us – we needed a solution that could scale with our business. Accuracy was also very important. Customer experience is critical, which means falsely declining good customers was not only impacting our bottom line but also our lifetime customer value. With Forter, we’re able to scale while keeping user experience frictionless.
What were some of the ways this was achieved?
Less friction in the buying process coupled with Forter’s accurate decisioning means that we’re able to create a smooth checkout process for customers and approve more legitimate customers. We’re not fully reliant on a rules-based system or manual reviews, which can inadvertently turn away good customers. Our approach with Forter yields a higher payment success rate and more happy customers.
What percent of orders in these emerging markets are fraud?
Before working with Forter, there was a time when more than 15% of transactions were fraudulent.
How was ChicMe utilizing manual reviews before Forter? How has that changed since implementing Forter?
Before working with Forter, our reviewers could only manually screen suspected fraudulent orders through simple rules, such as the order amount, purchase frequency, etc.
When certain orders were screened out, the reviewers would identify whether there is a risk in the transaction based on the behavior of users. But, in most cases, they still couldn’t draw a clear conclusion, in part because they were worried about accidentally denying legitimate customers, which would lead to a poor user experience.
When these concerns arise, reviewers would attempt to contact those customers and ask them questions in order to verify their identity, such as providing a photo of the credit card. If the customers couldn’t provide it, then the transaction would be canceled.
Now, working with Forter’s identity-based model, we can more accurately identify suspicious orders, meaning the workload to screen orders is significantly reduced.
How has implementing Forter affected the manual review process?
Before Forter, our manual review rejection rate was usually about 3% of overall transactions, and the current rejection rate with Forter is about 2%. Our overall fraud rate was originally around 1%, and it has now decreased to less than 0.5% and is gradually declining.
Our fraud rate in Mexico once reached more than 15%. After working with Forter, it returned to around 1% with normal rate of fluctuation. In mainstream markets such as Europe and the United States, it fell from about 0.8% to less than 0.5%.
Outside of what’s been mentioned above, have there been any additional (possibly unexpected) benefits to implementing Forter?
As the chargeback rate has decreased, our payment success rate on the issuer’s side has also improved because of the quality of transactions.
Do you have any tips for other merchants trying to prevent fraud?
Payment risk control is a professional and challenging task. I recommended working with a professional team to address fraud prevention. We let Forter help us manage fraud and keep our payment risk control in good shape so that we can focus on how to expand into new markets and deliver great user experiences.
Want to learn more about how ChicMe increased payment success rate and improved the customer experience? Click here to read the full case study.