WePay's Veda Risk API brings personalized risk management to online payments

Patricio Robles
May. 17 2014, 03:01PM EDT

To combat payment fraud, WePay, an API-centric payment provider that launched in 2008, built Veda, a custom risk engine that the company uses to identify fraud patterns and create risk scores for every customer transaction. In an effort to make Veda's risk analyses even more robust and identify subtle fraud patterns, WePay recently unveiled a new API at the Finovate Spring conference.

One of the biggest challenges facing online payment providers is fraud. As digital payments have boomed, so too have the number of fraudsters attempting to game the system.

To combat fraud, WePay, an API-centric payment provider that launched in 2008, built Veda, a custom risk engine that the company uses to identify fraud patterns and create risk scores for every customer transaction.

In an effort to make Veda's risk analyses even more robust and identify subtle fraud patterns, WePay recently unveiled a new API at the Finovate Spring conference. The Veda Risk API, which WePay bills as the first of its kind, allows the company's merchants to provide additional data points they collect about their customers to WePay so that Veda can create custom risk scores for their transactions.

The first WePay merchant using the new capabilities of the Veda Risk API is mobile invoicing service InvoiceASAP. According to Paul Hoeper, the company's CEO, InvoiceASAP submits data it collects from the 125,000 invoices it processes each month to WePay's Veda Risk API. WePay analyzes InvoiceASAP's data, looking for fraud patterns, and factoring those into its ultimate determination of the risk associated with the transaction.

"Veda easily adapts to incorporate any type of information our platform partners may have available. We evaluate hundreds of data signals per transaction and with our new Risk API we will continue to add even more," WePay's VP of Risk John Canfield explained.

According to WePay, Veda has been able to reduce losses "by over 75% year over year without adding any additional fields to signup or checkout." To accomplish this, WePay looks at data from a variety of sources, including social networks like Facebook, Twitter and LinkedIn. By allowing WePay customers to submit their own customer data for analysis by Veda, WePay has the potential to reduce losses even further. As WePay's Canfield observes, "WePay recognizes that no two platforms are the same and neither are their fraud patterns."

Coming soon: personalized APIs

Personalization is common on the web. In fact, not a day goes by in which the average consumer doesn't interact with personalized content. Online retailers, for instance, routinely use data to display products that are more likely to be of interest to a specific user. The goal of personalization: offer a better, more relevant experience, producing a greater return in the process.

Personalization is not yet ubiquitous in the world of APIs, but with API usage booming, it's only a matter of time before companies begin exploring the ways they can personalize their APIs for the applications and services that are consuming them.

WePay's Veda Risk API is a good example of what API personalization will often look like: API consumers feed their own data to an API which uses the data to provide responses that have been adapted specifically for that consumer. Instead of one-size fits all APIs, companies will offer flexible APIs that respond to the needs of individual consumers. When done right, this will give providers the ability to deliver a much more useful and effective API for their customers.

In competitive markets, personalization could even become a crucial differentiator and retention tool. By taking in data from customers and using it to make their APIs more effective, companies like WePay might even be able to create a variant of the kind of network effects that have proven to be so valuable for consumer internet companies.

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