Fraugster introduces a new alternative credit decisions solution

Fraugster, an AI payment technology company, announced today the launch of Alternative Credit Decisions. This product allows Enterprise merchants to approve more customers and reduce credit risk. A new approach is urgently needed as BNPLs report much higher bad credit impairment rates than credit card holders.

Volume BNPLs are able to write down $19.2 million of bad debt per $1 Bn of processing compared with $270k for credit cards. Millions of customers around the world continue to be denied service because BNPL providers or e-commerce merchants cannot accurately assess their risk. A significant number of returning customers are treated as if buying online for the first-time. Credit decisions lack important data.

Alternative Credit Decisions enriches BNPL credit scoring models with over 100 attributes that give a more accurate picture of a buyer’s true credit risk. These include highly valuable data points like a buyer’s positive transaction history, account history, purchase history and unpaid amounts. Global network intelligence and real time graph networks make this possible.

Christian Mangold, Fraugster CEO says “Our mission is simple, we want our customers to feel confident that they can trust the person they are approving to repay the amount they are borrowing. The positive results we are already seeing with trial customers make me confident that we can help the e-commerce ecosystem approve more customers without increasing exposure to loan defaults.”

Fraugster customers won’t only benefit from more accurate decisions, but also reduced costs. BNPLs and enterprise traders use credit bureau checks to improve their approval decisions and pay a fee per check. Alternative Credit Decisions makes it possible to eliminate the need for credit bureau checks and save money. It also improves accuracy and reduces costs. It also allows customers to rationalise costs incurred by third-party vendors.

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