Case Study: Sendle faced with sophisticated fraud upon US expansion

Small e-commerce business shipping carrier Sendle was faced with sophisticated fraud attacks as it expanded into the USA.

Digital Nation Australia spoke to Zway Yee, VP marketing Australia and global head of fraud at Sendle, about how the organisation responded and the role Stripe played in arming the organisation against criminal activity.

According to Yee, fraud was one of the biggest challenges that the business faced as part of their expansion, and occurred differently in the US than what they were prepared for due to the shift in dynamics.

In Australia, Sendle is primarily a pick-up service, whereas in the US it is primarily a drop-off service, said Yee.

“In Australia, we tend to see less of that level of sophisticated fraud generally because people don't want to commit fraud from where they work or where they sleep. It's a very different dynamic to committing fraud when you're dropping it off much more anonymously at a post office, for example,” he said.

According to Yee, the level of fraud that the business experienced in the USA was more sophisticated and professional. In order to combat this, Sendle invested in Stripe Radar in order to better prevent bad payments as they occurred.

“We've been with Stripe, basically since the day that we started the Sendle business in Australia, they’ve been a valued partner from day one,” said Yee.

“We’d relied heavily on them from a payment perspective and it was kind of a really natural fit when these types of attacks started taking place in the US it was the logical choice, really for us to go with Stripe as a vendor for us, to prevent fraud.”

According to Hayley Hopwood, head of growth Australia and New Zealand at Stripe, Sendle implemented the Stripe Radar solution as a first layer of defence against bad actors.

“Our team worked closely with Sendle’s fraud analysts to tailor the platform for them. This process enabled Sendle to use the platform to build robust Rules around both stopping the immediate threat and identifying future threats,” said Hopwood.

“It leveraged the Rules engine to stop fraudulent activity at the payments level, minimising damage and ensuring optimal fraud protection, ultimately getting the company back on track for its US expansion strategy.”

Hopwood said that Sendle has achieved an RO1 of 11x within one year of implementation, and has been able to prevent the fraud loss of almost 30 percent of US business revenue.

Yee said that Stripe Radar for fraud teams has added a more sophisticated diagnostic of transaction-level data.

“Being able to prevent bad payments at the point of payment and at the time of payment, in near real-time, really just allowed us to first fundamentally understand how we were being attacked, where they were originally from understanding, the vectors that they were able to come in and abuse our system. And from that, we were able to use their product to layer upon our ability to prevent those types of transactions taking place so that we could stop those attacks,” he said.