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The story of a Greek Unicorn

Viva Wallet is the first fully cloud-based, European merchant acquirer, processor and neobank. It has become one of the most prominent​​ payment companies in Europe and provides a wide range of financial services to merchants and consumers. It has a digital wallet, terminals and soft-POS for merchants, a 100% cloud-powered merchant acquiring platform directly connected to the card schemes, a payment service provider and an issuing bank too (after buying Greece’s only online consumer bank in early 2021). In January 2022, JP Morgan announced that it was acquiring 49% of Viva Wallet, making it one of the fastest growing and most well backed FinTech unicorns in Europe. 
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8x
Return on Investment

Summary success story

Viva Wallet, a Greek unicorn in the payment industry, uses Fraudio’s Merchant Initiated Fraud Detection solution to stop fraudulent merchants while facilitating Viva Wallet's hyper-growth at the same time.

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600%
Increased efficiency of the fraud team
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3 Weeks
Fraud attempt are caught weeks earlier than legacy solutions
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7x
Growth in transactions
*this result was obtained during an analysis over the course of the 2021-2022 period

Problem
Fraudulent Merchants

  • For a fast growing merchant acquirer such as Viva Wallet, large financial fraud losses can come from fraudulent merchants.
  • MIF is a recent and growing trend where fraudsters create companies and merchant accounts in order to appear as legitimate businesses. However, the primary purpose of the merchant account is to defraud both consumers and the merchant acquirer by processing stolen cards and/or not shipping goods to consumers while the merchant withdraws the settled to their account and disappears with the money.
  • This leaves the merchant acquirers such as Viva Wallet with the bill to repay consumers, which can run into millions of euros.
  • This fraudulent activity is described as merchant bust-out fraud, merchant-initiated fraud, merchant acquiring fraud, or simply as merchant fraud.

Main bottlenecks

The situation
before Fraudio

Viva previously relied on the traditional approach of a rules-based engine for each transaction. Those rules were hard-coded rules with an “if-then” framework that resulted in many false positives and created disruption in the business of their customers. This system required a large team of people to check every alert, hence why they needed an AI-assisted system to handle the workload.

  • Risk of large losses from fraudulent merchants arising from fast onboarding
  • Time-consuming and unscalable investigations’ workflow/process, with too many false positives
  • Existing alerts only notified Viva when loss exposures from merchant-initiated fraud were significant
  • Growth ambitions capped by limitations on scaling the fraud & risk team

What is the Solution?

Fraudio’s MIF product aims to:
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Reduce false positives and false negatives

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Efficiently monitor fraud in real-time

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Enabling further efficiency within the existing fraud investigation teams

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Significantly Reduce fraud losses

The Merchant Initiated Fraud (MIF)
Detection Product

Developed to support companies growth, this product provides fraud investigation teams timely information about the risk of fraudulent merchants through a merchant portfolio, with Fraudio continuously monitoring all money flows, conducting peer group analyses, behavioural pattern analysis, and transaction sequence analysis.

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Implementation of
the solution

After considering several fraud management solutions, the Viva Wallet team was frustrated with existing solutions that were unfit for their needs. Through various workshops and a Proof-of-Results, the Fraudio team was able to show Viva Wallet how the MIF product met their needs and solved the crucial problem that they had with fraudulent merchants.

After implementing Fraudio’s MIF product Viva Wallet has seen the following positive results:

  • False positives (alerts indicating fraud has occurred that end up being incorrect) have decreased dramatically and false negatives (cases of actual merchant fraud that Fraudio was not able to detect) have not been observed since the product was deployed.
  • When fraudulent activity is detected, Fraudio informs Viva Wallet immediately, so that emergency measures can be implemented to stop financial losses.
  • Efficiency of the transactional behaviour monitoring has increased due to the real-time monitoring.
  • Viva Wallet has grown 7x in terms of transactional volume, but its fraud investigations team has not grown. In fact, each fraud investigator has become 600% more efficient because of the tools that Fraudio has provided.
  • Fraudio has been able to catch fraudulent merchants on average 3 weeks earlier than the previous solutions Viva Wallet implemented, fraudsters have less time to inflict losses, of which there has been a significant decrease.

Main benefits

Merchant Initiated Fraud Detection Product

  • Enabling hyper efficiency from existing fraud investigations teams, allowing them to focus on high-value investigations
  • Unlocking the ability to scale your business faster without scaling your team
  • Quicker time to receive merchant fraud alerts significantly reduce losses
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Advantages over other anti-fraud solution vendors

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“Fraudio was able to adapt to us, and not us adapting to them. Most of the tools in the market right now have a “one size fits all” solution that is rigid and very demanding. Fraudio worked with us through various workshops to learn our needs and adapt their way of operations to our model. After giving them some data, they were able to transform their engine to adhere to our models to give us valuable results with a time to market and time to release that was much, much shorter compared to other systems.”

Giorgios Gkionis
Chief Software Architect (Risk and AML) at Viva Wallet

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“The key difference between us and our competitors is that we don’t produce custom models per client, we produce our own centralised models by translating our clients' data schemas to our internal one. This allows us to give clients access to the world class fraud detection models that we have been producing over the years as soon as they're integrated.”

João Moura
CEO of Fraudio

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I see the bottom line. The bottom line is that each and every notification that Fraudio sends to us is taken very seriously and very promptly within our team. Every fraudulent transaction that is under the umbrella provided to us by Fraudio is caught very early on.

Giorgios Gkionis
Chief Software Architect (Risk and AML) at Viva Wallet

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