One of the main challenges in the world of online payment is to find the ‘perfect solution’ that eliminates fraud, while increasing conversion rates. 3-D-Secure, the industry’s standard security layer for fraud detection, is far from being perfect. While the system proves to be a good fraud detector, it comes at a very high cost for both merchants and customers. Customers tend to leave their shopping cart because they lose patience with the payment process, leading to a reduction in conversion rates and revenue for the merchant.

The Credorax Innovation Lab

Recognizing the crucial need for a technology solution for fraud prevention, Credorax decided to dedicate a significant amount of resources into the research and analysis of the subject, and built the Credorax Innovation Lab to focus on finding a product to replace 3-D-Secure.

Credorax decided that the only way to solve this issue – not only for the company but the industry as a whole – was to join forces with other industry experts in this area. So, we teamed up with Fraugster, a young and innovative company built by security experts, using Artificial Intelligence as the foundation of their product.

Together, Credorax and Fraugster analyzed the different fraud detection options currently available: manual fraud review, human rules, and machine learning.

The conclusion of our research was that, by adding a layer of protection with AI technology to go hand-in-hand with the human interaction of fraud analysts and management, we could create the lowest fraud statistics for merchants.

The Innovation Lab gave birth to a risk-free solution whereby Fraugster takes over full liability for every payment transaction. The integrated solution is very precise, combining both companies’ strengths, working in the following key chronological steps:

ModusLink carried out our first merchant trial. They integrated the Credorax-Fraugster solution, and after only three months of deployment, the KPIs really speak for themselves:

  • Total merchant fraud cost savings, including chargebacks: €200,000 (these savings are forecast to continue to grow exponentially)
  • Revenues increase: 9%
  • Total approval rates increase: 5%

We are proud that together with Fraugster, we have developed a solution that solves a main pain point of the whole industry: eliminating fraud, while increasing revenues.

We hope this has been helpful. Credorax representatives are available 24/7 to explain more about our chargeback management and representation services at