Last month, we improved our AI tooling to give you even more flexibility when combating fraud. Historically, Radar’s default rules have allowed you to automatically block transactions whenever a card’s CVC or postal code verification fails. Now, you can enable new Radar rules that combine our machine learning models with the issuer’s CVC and postal code response in real time. This ensures that low-risk transactions are authorized while maintaining the default “block” behavior for higher risk traffic. These new adaptive rules can help you minimize fraud while worrying less about accidentally blocking legitimate revenue.

Businesses that migrate to these new adaptive rules see a 1.3 percentage point increase in payment success rates with minimal changes to their fraud rates. The net result is the potential for businesses on Stripe to collectively earn billions of dollars in additional revenue each year. 

Combining AI with issuer decision-making

The introduction of adaptive rules is enabled by two key factors: Stripe’s underlying AI infrastructure, which allows us to continuously improve our models for fraud prevention, and our collaboration with issuers through the Enhanced Issuer Network.

The Enhanced Issuer Network allows issuers to securely access Radar’s AI-powered fraud scores for transactions. This additional data helps issuers make more informed decisions about whether to decline or authorize transactions. As a result, when an issuer authorizes a transaction despite an incorrect CVC or postal code, we know they’ve taken Radar’s scores into account, which signals to us their confidence in the payment’s legitimacy. 

Now, Radar’s new rules treat the issuer’s response as an additional input, allowing for some transactions to go through that would have otherwise been blocked. First, our AI models use data across our network of millions of businesses and tens of billions of transactions to develop a risk score that predicts whether a payment is likely to be fraudulent. Based on this score, we block the transaction, trigger a manual review, or send it to the issuer.

The issuer then either authorizes or declines the transaction, and sends us new, additional information with their decision—such as whether the CVC or postal code was incorrect (which is not something we know at the time Radar’s models initially go to work). At this point, Radar combines the issuer’s response and our original risk score. For example, depending on your other Radar rules, we would block higher risk transactions with an incorrect CVC, while allowing lower risk transactions with an incorrect CVC—ultimately helping you increase payment success rates.   

Helping you increase revenue while reducing fraud

Businesses can enable the new Radar rules directly from the Dashboard. Enabling the rules has no impact on any other default rules, and Radar will continue to block high-risk traffic just like it always has. You can also use Radar for Fraud Teams to customize these adaptive rules based on your business’s needs. 

Learn more about Radar’s adaptive default rules, or get started with Radar today.