Fraud Prevention Is About the Right Amount of Friction in the Right Place
The goal is not minimum friction or maximum security. It is matching checks to context. A first-time buyer and a 50th-order customer should not get the same treatment.
Idan Hayon
Co-Founder & CEO
The goal of fraud prevention is not minimum friction, and it is not maximum security. It is putting the right amount of friction in the right place. A first-time buyer and a loyal customer on their 50th order do not carry the same context. Adyen has reported that 50% of businesses are seeing more false declines, while static controls can block up to 10% of legitimate customers. Extra verification on a trusted, normal-looking order is often revenue walking out the door.
The goal of fraud prevention isn't minimum friction, and it isn't maximum security. It's putting the right amount of friction in the right place.
Most systems treat every transaction the same. A first-time buyer goes through the same checks as a loyal customer placing their 50th order. Those two transactions don't carry the same context.
The repeat customer has a history. You know how they normally pay, what they buy, where they shop from, and how their account typically behaves. Adding another verification step might reduce risk, but it also creates friction, and that cost adds up.
Static controls block good customers
Adyen's latest fraud report found that 50% of businesses are seeing an increase in false declines, while static controls can block up to 10% of legitimate customers. That's revenue walking out the door in an attempt to protect revenue.
The answer isn't removing controls but applying those controls with more precision. A transaction with multiple risk signals might justify extra verification. A trusted customer behaving exactly as they usually do probably doesn't need the same treatment.
Trade-offs get cheaper with context
Fraud prevention will always involve trade-offs between risk, friction, and growth. The better you understand the context around each transaction, the less often legitimate customers have to pay the price for that trade-off.
Related: balancing fraud prevention with customer experience, declining more transactions loses good customers, how it works, and the FAQ.
If you want ranked rule changes that use your transaction context - not the same check for every order - book a demo.
Originally shared on LinkedIn.
FAQ
- Should every checkout get the same fraud checks?
- No. A first-time buyer and a loyal customer on their 50th order do not carry the same context. Repeat buyers have payment, product, and behaviour history. Adding the same extra verification to both can cut some risk, but it also adds friction where you already have reason to trust the customer.
- What do static fraud controls cost merchants?
- Adyen has reported that 50% of businesses are seeing more false declines, and static controls can block up to 10% of legitimate customers. That is revenue leaving in an attempt to protect revenue. The fix is not removing controls. It is applying them with more precision.
- When is extra checkout friction justified?
- When multiple risk signals show up on a transaction that lacks a trusted history. A known customer behaving exactly as they usually do probably does not need the same step. Fraud prevention will always trade risk, friction, and growth. Better context means good customers pay that price less often.
More buyer questions on Radar, Protect, chargebacks, and Signifyd alternatives.
View FAQMore from the blog
Ready to See It on Your Data?
Book a live walkthrough and see how FraudPulse turns your payment data into actionable fraud intelligence.
Book a Demo