The Best Risk Management Tools for Transaction Fraud

The Best Risk Management Tools for Transaction Fraud

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by Bence Jendruszak

There’s no shortage of fraud and risk management tools designed to beat bad transactions. Let’s see which ones will work best for you.

Choosing the right fraud analysis tool can be one of the most important business decisions you make. It can save you hundreds of thousands of dollars. But the wrong one could also cost you a lot in lost time, efforts and headaches.

So to ensure you’ve got all the right tools to beat fraudsters, we compiled a list of all the major fraud and risk management providers currently operating on the tech landscape. 

We’ll go over pros and cons of each, and will hopefully help you pick the best one for your needs.

But first, a quick word about transparency:

Wait – Aren’t You a Fraud and Risk Management Startup?

That’s right. And in fact, SEON was founded after we tried many competitors’ fraud management tools. We couldn’t find one that worked perfectly for us, so we built a platform with all the features we wanted to see.

But we also know that we’re new to the space, and our risk management tools are constantly evolving. So we’ll be the first to admit when you’re better off looking at another provider. 

And now that’s out of the way, let’s get started on understanding the core differences between various risk management tools

What to Consider For Your Risk Management Tool

Before we go over a list of the best solutions, let’s examine what categories of tools you’ll find, and some key features to consider.

The Features

There is really only one way to fight transaction fraud: acquiring more knowledge about your customers. But what you can do with it varies based on the kind of risk software you’re using:

  • Data tools: these solutions let you aggregate more info based on a single point like an email address or phone number. Great for manual reviews, or for managers who just need extra insights. Some calculate a risk score, others simply deliver in raw form.
  • End-to-end platform: you will get extra data and rules to calculate a risk score more efficiently. This gives you a lot more control and flexibility over how to mitigate risk. The most sophisticated platforms will use ML to help you discover new risk rules automatically.

It’s also worth mentioning that it’s entirely possible to combine multiple tools at once for a multi-layered risk strategy.

Understanding The Pricing Models

While all fraud companies operate under the SaaS model, you can also roughly group them based on how they charge:

  • Chargeback guarantee: the provider will charge a percentage of the amount processed, and offer to cover the fees in case a chargeback request slips through the net.
  • API or check based: you pay a micro fee every time the software checks an action. 

The second option is straightforward and self-explanatory. You only pay for what you use. 

The first, however, warrants a bit more investigation. On the one hand, chargeback guarantee models are great because your business won’t have to deal with disputes any longer.

But on the other hand, there is a strong incentive for the risk management tool to block more payments that would have been valid. They are more conservative when it comes to false positives, which could actually damage your bottom line in the long run. 

For a complete comparison between the micro fees vs chargeback guarantee, you can see this dedicated post.

We should also acknowledge that payment gateways increasingly offer built-in risk management tools. Here’s why it’s probably the best idea to rely on them alone.

Legacy Vs Modern Solutions

Another important factor to consider. Do you want to go with a mature, reputable seller? Or a newcomer who’s trying to make their mark on the tech scene?

Both have their pros and cons:

  • Legacy tools: a.k.a enterprise risk software. Better suited to enterprise clients. These are risk management tools from companies that have decades of experience, and a well-oiled workflow for checking bad data. The downside is that their risk management software rollouts are slower, and datasets can become stale – especially when they use shared blacklists (a merchant marks a credit card as fraudulent, and it’s blocked across the entire platform for every other client). They also tend to be much pricier.
  • Startup model: the adapt-or-die model fosters innovative technology, usually run by younger teams. There may be growing pains, but also a more agile approach to risk, which can be helpful as fraudsters are always evolving their attacks based on your line of defense.

What are the tools used in risk management

You will find that the most common ones include data enrichment (to learn more about our customers) and risk scores. It can focus on IP and email addresses or phone numbers. Risk scores are calculated based on rules you create in our system.

Hidden Costs and Other Things to Consider

Let’s now look at all the extra parameters that may affect your ROI when it comes to risk management tools and fraud monitoring tools:

  • Integration time: the longer it takes to deploy the solution, the more you are losing to fraudsters.
  • Training / learning curve: similarly, if the product is too complicated, it could be weeks or months before you start seeing some real results. You might see a ton of false positives and negatives until the solution really “understands” the transactions processed by your business.
  • Support as extra: some providers have a limit on how often you can contact their support team. 

Okay, without further ado, we can now start looking at specific examples with the key fraud tech providers operating today. (You can click on the name to jump directly to their description.)

Transaction Fraud tools comparison
Comparison of the key fraud tech providers

ArkOwl – Lightweight Email + Phone Analysis

screenshot of ArkOwl's website displaying their email analysis tool's benefits
Screenshot of ArkOwl’s website displaying their Email Analysis Tool

ArkOwl provides live, accurate and rich analysis mainly for email and phone verification. This helps predict how risky a user will be before they process a payment on your site. Their analysis looks at domain, breaches, and social networks, amongst others.

Their tool counts 81+ points used for analysis and ensures data is delivered in raw form, with what they claim are no false positives or negatives. There are no limits on the number of users you can add to an account, as you only pay for the bandwidth you use. Payment is flexible either as a monthly subscription or pay-as-you-go, and they offer a free trial.

When it comes to social media, it’s worth noting that ArkOwl looks at some of the main networks (Google, Facebook, Twitter), but the number of databases they can check are limited. This is certainly due to the fact that ArkOwl is a small team – and scraping social info can be extremely complex and time-consuming as the sites change their settings all the time.

  • ArkOwl risk analysis type: data enrichment
  • ArkOwl Pricing: pay per API request. Must contact sales for a quote.
  • ArkOwl pros: lightweight email and phone verification with basic social media checks. Good for companies with risk management software in place who need extra knowledge points.
  • ArkOwl cons: a very small company, so not many online documentation, and a limited number of sites they can check for social media profiling, for instance missing out on phone messenger lookups. Can’t help with more advanced attacks.

Emailage – Mature, Reliable End-to-End Platform

Screenshot of Emailage’s website detailing the product benefits of Email Risk Score. Improve customer experience, reduce fraud losses, and scale business, not risk as benefits.
Screenshot of Emailage’s website detailing the product benefits of Email Risk Score

Emailage, recently acquired by the tech corporation LexisNexis, delivers risk intelligence via email addresses analysis and predictive scores. The company has been operating for a long time, putting it in the category of mature, enterprise risk management software, but they nevertheless innovate with tools such as their Chrome extension.

When it comes to analysis, Emailage has a surprisingly low number of data points it analyzes in real time, relying instead on proprietary databases they have built over the years. This can make it challenging to use effectively in certain emerging markets.

On the flip side, the dashboard is well-designed and there is no shortage of online resources thanks to webinars, good documentation, and 24/7 customer support, which could make it one of the best risk management software for enterprise clients.

  • Emailage prevention type: enrichment, end-to-end platform
  • Emailage Pricing: pay per check. Must contact the sales team for a quote.
  • Emailage pros: lightweight email and phone verification with basic social media checks for risk assessment. Good for enterprise clients with high budgets and local customers.
  • Emailage cons: no device fingerprinting for extra analysis, preset rules or permissions for team management. Price per request is at the higher end of the spectrum, and support is a paid extra, so not recommended for SMEs.

Ekata – Ease of Use and Modular APIs

Screenshot of Ekata's website presenting the benefits of their services. Pre-authorization risk assessment, account opening, order verification and manual review.
Screenshot of Ekata’s website presenting the benefits of their services

Ekata leverages identity verification to validate customers and prevent risk. For analysis, they use a tool called the Ekata Identity Graph. It acquires global data from other providers to see which users have been vetted, based on phone, address and email validation.

Here again, the lack of real-time data can be problematic and impact companies in international markets: your defence strategy will need to be tweaked based on how much information the company’s databases already hold. 

The advantage is that you can use Ekata’s risk management software as a modular tool, by selecting their Transaction Risk, ID check, Data enrichment or Address Validation APIs. You can also use their Pro Insight tool, built especially for manual reviews.

  • Ekata risk analysis type: data enrichment, end-to-end platform
  • Ekata Pricing: pay per API call. Must contact the sales team for a quote.
  • Ekata pros: really easy to use for manual reviews. Modular tools. Good for small risk assessment teams who need to pick and choose features for a multi-layered security stack.
  • Ekata cons: fraud prevention reports are fairly basic, and doesn’t include critical social media footprint checks. You won’t be able to perform KYC checks or plan to block advanced fraud attempts.

TransUnion (formerly Iovation) – the iGaming Go-To

Screenshot of TransUnion's (formerly Iovation) website detailing their three products called Identity, Authentification and Fraud Prevention
Screenshot of TransUnion’s (formerly Iovation) website detailing their products

If you’re in the iGaming industry, TransUnion, or as it was once called, Iovation, is pretty much the risk management software leader. This is due in part thanks to their proprietary device fingerprinting solution, and a risk engine which supports some custom rules. 

Founded in 2004, the company has amassed a knowledge base of more than 650M devices from every country in the world, which can help block potential fraudsters who use the same browser.

The key complaints we hear from online review sites are that some unscrupulous iGaming companies use the product to mark their own customers as fraudsters, solely so other competitors cannot board them. In terms of compliance, there are also concerns that the company cannot deliver the best data protection for its customers, which could impact your project’s compliance.

  • TransUnion prevention type: data enrichment, end-to-end platform
  • TransUnion Pricing: pay per API call. Must contact the sales team for a quote.
  • TransUnion pros: powerful device fingerprinting, and a sure bet if you want to use the same engine as all other iGaming companies.
  • TransUnion cons: not ideal for GDPR compliance, false positives due to customers gaming the shared blacklists. No reverse email and phone lookup, which might not work for those who need advanced enrichment features for fraud prevention.

Ravelin – Blackbox Machine Learning

Screenshot of Ravelin's website presenting their two products called Fraud solution suite and Accept for Payments
Screenshot of Ravelin’s website presenting their two products

Founded in 2016 in the UK, Ravelin made its name thanks to their machine-learning technology, designed to help online merchants and payment providers reduce losses to enterprise risk. Their risk management software includes a rules engine (with preset rules) and shared blacklists (called a consortium database).

The machine learning algorithm is certainly one of their strong suits to identify risks, albeit with the caveat that it’s operating as a blackbox system – which means you won’t always understand why or how certain rules are suggested. You also won’t get preset rules when you get started, which means potentially dealing with a high number of false positives and negatives at the beginning.

  • Ravelin risk assessment type: end-to-end platform
  • Ravelin Pricing: tier-based, 
  • Ravelin pros: it offers blackbox machine-learning system. The graph network visualization tool is a useful feature for fraud and project managers.
  • Ravelin cons: blackbox algorithm with little insights into why rules are suggested. No social media lookup and limited device fingerprinting parameters.

Riskified – Great for eCommerce SMEs

Screenshot of Riskified's website and their product listing: Account Protection, Payment Authorization, Dynamic Checkout, Alternative Payment, Chargeback Guarantee, and Representment
Screenshot of Riskified’s website and their product listing

The Tel-Aviv-based company Riskified’s mission is to turn shoppers into customers by reducing fraud and bad orders. 

With a large focus on increasing conversion for online stores, Riskified does wonder at analyzing payment information for dynamic checkout and even includes their proprietary alternative payment solution.

Unfortunately, the chargeback-guarantee model creates an incentive to be conservative, which can be frustrating for businesses who need more manual control over the orders reviews. 

For modular APIs, custom rules and advanced device fingerprinting, you’ll also need to look elsewhere, but the representment for chargebacks can be a life saver for stores that don’t have the time to deal with disputes.

  • Riskified risk monitoring type: end-to-end platform.
  • Riskified Pricing: percentage of transaction amount, chargeback guarantee model. Must contact sales for a quote.
  • Riskified pros: conversion-focused, which can work well for small merchants who don’t want to deal with chargeback disputes.
  • Riskified cons: the lack of control over manual reviews will be damaging to mid-size and larger online stores who need full control over their sales. 

SEON – Our Unique Take on Risk Management Software

SEON's website, displaying their two products called the Intelligence Tool and the Sense Platform
Our website, displaying our two products

As mentioned in the intro, SEON was started by business owners who couldn’t find the perfect anti fraud solution. As such, there were a number of important features we knew we wanted to deliver for our clients:

  • Ease of integration: our integration timeline is one of the shortest in the fraud tech world. The flexibility of our modular APIs also give you plenty of control of how you connect SEON to other web apps.
  • Outstanding UX: from full team management features to a Gmail-like transaction view, we understand that delivering a better experience for fraud teams translates directly into a better way to identify risks for business growth.
  • Complete anti-fraud suite of tools: advanced device fingerprinting and social media lookup solutions. SEON is also customizable enough to fit a number of industries by helping with AML and geo compliance, chargebacks, account takeover, and bonus abuse, amongst others.
  • Innovative features: our Google Chrome extension for enrichment and messenger lookup, for instance, are pretty much unique on the market.
  • Complete transparency: our machine learning engine delivers rules in a human-readable format, so that you always know how to best leverage them. We are also the only fraud tech company to deliver clear, transparent pricing along with a free trial.
Screenshot of SEON's Sense Platform product, showing its Machine Learning Rules
Screenshot of the SEON Machine Learning Rules

Of course, being a growing startup does mean there are things to improve on. Our online resources, for instance, are constantly updated to deliver a fully self-serve approach – if you need an on-site team to come and assist your IT team, you’ll probably have to look elsewhere…unless chatting on Slack/Skype or a Zoom call works for you.

  • SEON risk analysis type: modular end-to-end platform, modular data enrichment
  • SEON Pricing: purely API-based. Pricing is available on our page.
  • SEON pros: flexibility, transparency, and full set of risk management software.
  • SEON cons: no on-site integrations and on-premise support.

SEON Risk Management Software: Some Key Examples

Talking about our risk management system features is one thing. Demonstrating how risk identification works in the real world is another, which is why we recommend you check out the following posts for more in-depth numbers:

And for more examples of fraud-related successes, you can find all our client case studies here.

Finding the Best Risk Assessment Tools for Payment Fraud

The risk identification and fraud risk management landscape is fast evolving. Legacy giants continue to grow and acquire each other. Meanwhile, younger startups develop innovative solutions and target specific niche markets. Choosing the best solution depends on your business needs and priorities.

But at SEON, we are dedicated to creating the ultimate fraud monitoring tools. Not just to reduce chargebacks but also to combat bonus abuse, multi accounting, and to help with KYC processes and AML regulations.

Our goal was always to develop risk management software that was flexible, powerful and transparent enough to fit any industry and meet any challenges for risk managers head-on. We certainly find our clients are more than satisfied with what we’ve built so far, and we hope you’ll give our products a try too.

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Author avatar
Bence Jendruszak

Bence is the co-founder and COO of SEON whose vision is to create a safer online environment for merchants in high risk verticals.

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