Forter, the first e-commerce fraud prevention firm to provide real-time approve or decline decisions for all online transactions, is preparing to conquer the Asian market.
Co-founder and CEO Michael Reitblat, speaking to Tech Wire Asiaat Web Summit, said he hadn’t decided on whether the company’s Asia headquarters will be in Hong Kong or Singapore, but he’s excited by the prospects e-commerce in Asia offers.
“Asia is way bigger on e-commerce than the US and it is certainly growing faster,” he said.
Last year, the startup processed more than US$20 billion in transactions and is hoping to have even bigger success in Asia Pacific.
The region, Reitblat said, is seeing increased cross-border trading, from Vietnam to China, with Singaporean startups selling pan-Asia. But demand for Forter’s services will likely come mostly from Asian e-sellers operating in Western markets.
“When Asian retailers sell to the Western world they need to abide by the local payment laws,” Reitblat said. “As they adopt these modern, or not necessarily modern, but Western technologies of e-commerce, they start facing the same risk problems.”
In Western countries, if online fraud occurs with a stolen credit or debit card, the merchant is the liable party.
According to Reitblat, this costs US merchants US$4 billion a year and non-US merchants lose another US$10 billion.
For example, he knows of a large merchant in the US who just sent US$100,000 worth of goods to Donald Duck in Texas. Because the retailer didn’t screen the sale, it resulted in a big loss for the company.
Combating this problem is costly business. But online retailers are also losing money from blocking suspected fraud that isn’t actually fraud. This loss is around US$20 billion a year in the US and an estimated US$100 billion globally.
Typically, Asian e-retailers are using people, data and simplified fraudster models to combat online fraud. But because labor is cheap in Asia, the costs for fraud prevention are not as high as in the West, but they are not as effective either.