Mercari Inc. Fully Implements Forter's AI Assessment Platform
~As a countermeasure against credit card fraud payment, balancing "security assurance" with "providing a smooth payment experience for genuine customers" ~

Forter (headquartered in New York, USA), which provides an AI judgment platform for next-generation commerce, and GMO Payment Gateway, Inc. (President & Chief Executive Officer: Issei Ainoura, hereinafter GMO-PG), part of the GMO Internet Group, announce that Mercari Inc. (Headquarters: Minato-ku, Tokyo; Representative Executive Officer and CEO: Shintaro Yamada, hereafter Mercari), operator of Japan's largest flea market app, has fully implemented Forter's AI detection platform as a countermeasure against credit card fraud payment.
Forter and GMO-PG jointly conducted verification from the initial stages with Mercari, and as a result, they have now adopted Forter's AI judgment solution. Additionally, GMO-PG's Online Payment Service" PG Multi-Payment Service" provides an API (Application Programming Interface) that standardly implements Forter's fraud detection function.

[Background of Introduction]

Mercari has implemented various fraud countermeasures to build a safe and secure user environment for customers, including measures against credit card fraud payment. Until now, based on our own rules, we applied 3D Secure ^(*1) to transactions deemed necessary and implemented visual verification for transactions deemed to require confirmation.
On the other hand, as fraud methods become more sophisticated, challenges such as 3D Secure friction (* ²) damaging payment experiences and increased human costs for chargeback ^(*3) and fraud countermeasures are emerging. To balance "security assurance" with "providing a smooth payment experience to genuine customers," new fraud payment countermeasure solutions have been selected.

• (*1) An identity verification mechanism that verifies the cardholder identity in the online credit card payment. Additional authentication may be requested based on information held by the card company.
• (※2) Refers to the time or interruption incurred by users during the procedures of payment. This includes transitions to the authentication screen and entering passwords.
• (※3) If a cardholder requests that they do not agree to the payment due to credit card fraud, the card company cancels the sales of the transaction and the merchant bears the payment.

[Forter Selection and Preliminary Verification Results]

In preliminary verification conducted prior to full-scale implementation, Forter exceeded Mercari's evaluation criteria in all three areas.

(1) Reducing the usage rate of 3D Secure and improving credit card GMV ^(*4)​

Forter returns a judgment based on three options when requesting a transaction: "OK (Approve)/NG (Reject)/ 3D Secure (Recommended)." If the three-choice option is used, merchants ^(*5) can avoid applying 3D Secure to low-risk transactions and focus their recommendations on transactions requiring a decision. Compliance with the mandatory introduction of EMV 3-D Secure ^(*6) is also automated within the same system.
In the pre-validation process, 3D Secure usage declined without increasing fraud risk, and credit card GMV improved.

(2) chargeback Reduce the amount to about one-tenth

Forter has a global identity network ^(*7). It analyzes approximately 6,000 data attributes in real time and evaluates the reliability of each transaction. Fraudulent methods evolve across borders. Therefore, Mercari placed great importance on a global-scale data infrastructure that does not rely solely on its own data when selecting it.
Originally, the chargeback occurrence rate was below the industry standard, but preliminary verification further improved from there. chargeback The amount was reduced to about one-tenth of the previous system level. For transactions judged as rejected, there were no incidents that mistakenly hindered genuine transactions.

(3) Reducing costs for visual checks and rule maintenance

On the platform of Forter, AI models are updated and new fraudulent practices emerging globally are handled in real time. Therefore, rule maintenance on the merchant side is unnecessary. Visual checks have also been automated, eliminating the burden of dependent work in fraud payment countermeasures.

• (*4) payment Method is credit card sales.
• (*5) Businesses that accept payment by credit card. In this case, we refer to Mercari.
• (*6) Based on Ministry of Economy, Trade and Industry guidelines, EC merchants are required to implement EMV 3-D Secure (the latest standard of 3D Secure) as a measure against credit card fraud.
• (*7) A data platform used to accumulate transaction histories across multiple businesses and to determine the identity and reliability of purchasers.

[Introduction via GMO-PG Integrated API]

In this implementation, GMO-PG utilizes the Forter integrated interface built on the "PG Multi-Payment Service." Because the entire workflow from Forter's fraud detection requests, application of 3D Secure based on the determination results, to payment processing is consolidated within GMO-PG's API, Mercari was able to implement Forter as an extension of its existing payment integration. By eliminating the need for separate API connection development and infrastructure with Forter, development workload has been reduced and the time from verification start to production shortened.

[Company Comments]

■ Keisuke Tanaka, Executive Officer, Mercari Inc., VP of Customer Service / Trust and Safety Marketplace

Mercari prioritizes the balance between creating a user environment where anyone can conduct transactions safely and securely, and achieving a smooth customer experience (UX) that eliminates friction during payment to the extreme. Until now, we have countered increasingly sophisticated fraudsters with our own fraud detection rules and 3D Secure risk-based assessments, but genuine customers have abandoned their carts, creating a dilemma. In a preliminary verification conducted under strong partnerships with GMO-PG and Forter, we achieved results by reducing chargeback to about one-tenth while improving payment success rates, thereby improving credit card GMV. We are confident that we have been completely freed from tuning and visual inspection tasks for our in-house fraud detection rules, and have built a solid infrastructure of payments for scalable business development going forward.

■ Forter Japan Country Manager Yosuke Noda

We are very pleased that Mercari, a leading Japanese e-commerce company, has chosen Forter as a partner responsible for enhancing security and payment customer experience. The results demonstrated in this preliminary verification clearly demonstrate that our real-time detection by our global network of 2 billion users not only 'blocks fraud,' but also 'removes friction and increases GMV and sales.' Going forward, we will continue to support Mercari and its fraud in 'thorough elimination' and 'core CX enhancement' during payment.

■ GMO Payment Gateway, Inc. Executive Officer Ryo Yanaka

As a PSP (Payment Service Provider/ payment Service Provider) providing infrastructure of payments to Mercari, and as a partner of Forter, we have jointly promoted this project from the early stages. Balancing payment security enhancement with a smooth payment experience for buyers is a challenge faced by many e-commerce operators. In this project, by combining Forter's real-time judgment with our payment system, we were able to simultaneously achieve a significant reduction in chargeback and improved GMV. Going forward, through the alliance between the two companies, we will continue to support Mercari's business growth and contribute to the development of a safe and secure payment environment in Japan's e-commerce market.

[About Mercari]

Mercari Inc., with the mission of "circulating all kinds of value and expanding the potential of everyone," operates the flea market app "Mercari" in Japan and the US, promoting global expansion through cross-border businesses. By connecting individuals worldwide through the power of technology, everyone can easily enjoy buying and selling goods, aiming for a prosperous society where resources circulate and individuals can realize what they want. Furthermore, the group is engaged in creating new value through finance businesses in Merpay, crypto assets-related businesses in Mercoin, and sports businesses through Kashima Antlers.

[About Forter]

Forter provides optimal AI assessments at every critical stage of commerce. Based on a global identity network, our in-house AI instantly assesses reliability from new registration to payment and returns. We always deliver the best experience to our loyal customers. Nearly one million businesses, including ZOZO, Eki-net, ASICS, and BEAMS, have adopted Forter to enhance high-quality customer loyalty. It delivers stress-free experiences for valued customers and reliable revenue for businesses.
For inquiries regarding this matter: https://www.forter.com/ja/request-demo/
Forter website: https://www.forter.com/ja/
Forter's Newsroom: https://www.forter.com/ja/newsroom/
Forter's Blog: https://www.forter.com/ja/blog/