Fraud prevention software is usually explained as one product. The buyers using it mean several things by the name — order fraud and chargebacks, fake traffic from bots and ad fraud, identity fraud in financial services — and the order-fraud buyers face a choice the name hides: pay a dedicated vendor for fraud decisioning, sometimes with a guarantee on the orders it approves, or rely on the screening that comes with the payment processor or platform they already use.
What is ecommerce fraud prevention software?
Ecommerce fraud prevention software screens online orders before they ship, deciding which to approve, decline or send for manual review, so a merchant avoids paying for fraudulent orders and the chargebacks that follow. Dedicated vendors such as Riskified, Signifyd and Forter do this as a service; payment processors and platforms such as Adyen, Stripe and Shopify include their own screening.
One ecommerce leader describes the dedicated model in a sentence: “you pay a percentage of each order and they check it, and if they approve it, they guarantee against chargebacks.”
What the interviews add is what buyers actually mean by it, and how they choose:
In these interviews the label covers three different purchases. Most buyers mean screening orders and chargebacks; a minority mean bot traffic and ad fraud, and others, mostly in financial services, mean account and identity fraud.
For order fraud, buyers weigh dedicated vendors offering fraud decisioning and, in some cases, chargeback guarantees against screening built into their payment processor or commerce platform. The guarantee-backed model is a major distinction in these interviews, although coverage depends on the product and contract. Among interviewed companies that identify their fraud tools, dedicated vendors and built-in screening appear about equally often; no buyer in this group names both as their fraud solution, although that does not establish that payment and fraud controls cannot operate together. Buyers judge the dedicated tools as much on the good orders they let through as on the fraud they catch.
What is the difference between a dedicated fraud vendor and a payment processor's fraud tools?
Dedicated vendors provide specialized fraud decisioning, sometimes with contractual protection against eligible fraudulent chargebacks on approved orders. Payment processors and commerce platforms also provide fraud screening, with protection and pricing varying by provider and service. Buyers here distinguish the approaches partly by who bears the financial risk of an approved fraudulent transaction.
Where a dedicated vendor offers a chargeback guarantee, it is what buyers say they are paying for, and some describe it bluntly: “for a lot of them, it's really just fraud insurance.” Every mention of a guarantee in these interviews concerns a dedicated vendor.
Built-in screening has its defenders. A retailer on Adyen says “We haven't had to use an alternative fraud solution in conjunction with Adyen; we've been able to uncover it all within Adyen itself.” Others say built-in tools let too much through.
The word “fraud” also means different jobs. A meaningful minority of buyers who use it mean something other than order fraud: bot traffic and fake ad clicks that waste paid media — “what I guess I would call wasted traffic, or just not a real human being,” in one buyer's words — or account takeover and identity checks in banking and payments. Those are bought from different vendors and judged on different numbers.
Dedicated fraud vendor
Screens orders using specialized fraud models and decisioning. Some services offer chargeback guarantees for eligible approved orders, with fees and coverage determined by the agreement. Riskified, Signifyd and Forter are the names buyers use most.
Built-in screening
Fraud screening available through a payment processor or commerce platform, including Adyen, Stripe, Shopify and CyberSource. Included capabilities, additional fees and chargeback protection vary by provider.
Bot and ad-fraud protection
Filtering fake traffic and invalid clicks before they cost money — a different purchase that shares the word.
Who buys ecommerce fraud prevention software?
Ecommerce and digital leaders, like most commerce software — not finance or risk teams. About half of buyers in market for fraud prevention hold ecommerce or digital titles, against about a third of all interviews, which is typical of commerce categories such as ecommerce platforms and product information management. None in market holds a finance, payments or risk title.
Companies using a dedicated fraud vendor are spread across sizes, about in line with the companies interviewed overall — this is not only an enterprise purchase. And ownership is often elsewhere: several buyers say another team runs the fraud tool, or that its details are kept close.
How do companies handle order fraud?
Four ways appear in these interviews, and two of them are about equally common. In order of how often buyers describe them:
- Pay a dedicated vendor for decisioning, sometimes with a guarantee
- Rely on the processor's or platform's built-in screening
- Build screening in-house
- Leave it to another team, or do without
The first two approaches are about equally common among companies identifying a fraud solution. None describes using both as its primary solution in these interviews.
A dedicated vendor, sometimes with a guarantee
Buyers pay per order for a decision, and in the guarantee-backed model for protection on approved orders. Their complaints are about price and about good orders declined without explanation — not about fraud the tool missed.
A consumer-electronics brand selling high-ticket hardware found its tool flagging orders placed by its own inside sales team, and could not loosen it; a marketing leader elsewhere says of unexplained declines, “they bring a hammer to the solution and I would really like a scalpel.”
The processor's or platform's built-in screening
Included with Adyen, Stripe, Shopify or CyberSource. Buyers who rely on it describe it as enough for their risk; its critics describe the opposite complaint to the dedicated tools — weak detection.
The companies here that dropped a dedicated vendor did so when they changed platform or processor: “we used to work also with Signifyd, but ever since we started Shopify, because it also had its own fraud analysis, we stopped. We canceled our contract.”
Build screening in-house
A minority of companies build their own rules and models instead.
For them the trade-off is friction: “every defensive layer we add has the potential to increase friction for the legitimate user.”
Leave it to another team, or do without
Some buyers do not know which tool is used, because payments or IT owns it; very few say they run nothing at all.
The pattern behind the moves is worth noting, though it rests on few companies. Switches from a dedicated vendor to built-in screening in these interviews came with a platform or processor change — a move to Stripe, a replatform onto Shopify — rather than from a decision about fraud itself. A home-goods brand that moved its payments for other reasons took its fraud screening with it, and its open fraud project afterwards was something else entirely: filtering bot traffic so it would not pay for it through paid channels.
Which fraud prevention tools do buyers rate highest?
Riskified, Signifyd and Forter are the dedicated vendors buyers name and rate most, and they rate close together, around 8 on a ten-point scale. Too few buyers have rated each for a decimal, and too few rate built-in screening as a separate product for a number to mean anything.
| Tool | Rating | What it means here |
|---|---|---|
| Signifyd | around 8 | Too few buyers for a decimal. A dedicated vendor whose buyers describe a chargeback guarantee; one buyer dropped it when moving to a platform with its own screening. |
| Riskified | around 8 | Too few buyers for a decimal. A dedicated vendor; buyers who compared it with others describe similar pricing. |
| Forter | around 8 | Too few buyers for a decimal. A dedicated vendor; one company moving from it to a peer cited cost and account management. |
| Kount | not rated | Named by several companies; too few buyers rated it to publish a number. |
| NoFraud | not rated | Named by a few companies; too few ratings to publish a number. |
Dedicated order-fraud vendors
Riskified · Signifyd · Forter · Kount · NoFraud · ClearSale
Built-in screening
Adyen · Stripe · Shopify · CyberSource · Braintree
What does fraud prevention cost, and how do buyers measure it?
Dedicated vendors charge per order, and price is buyers' most common complaint about them. No prices are published here.
Buyers who shopped the dedicated vendors say the prices are similar — “they're just the same, if not more expensive. I just wish it wasn't as expensive,” says one smaller brand — and the one move between dedicated vendors described here was driven by cost and account management rather than detection. Buyers using built-in screening often describe it as part of the payment-processing or commerce-platform service they already purchase, although advanced fraud features or protection can carry additional fees. That helps explain why changing processors or platforms can also change which fraud tools a merchant uses.
Buyers measure fraud tools on both sides of the decision: approval rate and false positives on one side, chargebacks and manual-review volume on the other. The good-customer side weighs as heavily as the fraud side. A retailer whose customers travel says “We've been sometimes scared that good clients were actually declined their orders because of their IP not being based close to the address of delivery.”
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Book mine →Should you buy a dedicated fraud prevention tool?
Start by checking what your payment processor or platform already screens. Many companies in these interviews run on built-in screening and say it is enough; a dedicated vendor earns its fee where order values, chargeback exposure or declined good customers make a guarantee and a closer decision worth paying for.
Three things follow from the interviews; the recommendations are ours, not practices buyers describe. First, measure what you are declining, not only what you are losing: track approval rate and false declines alongside chargebacks before you choose, since good orders turned away cost revenue without showing up as fraud. Second, ask how a vendor explains its declines — unexplained declines are the complaint buyers raise most about dedicated tools after price. Third, separate the fraud you have from the fraud you are shopping for: bot and ad-fraud protection is a different purchase from order screening, with different vendors and different measures.
For the systems fraud screening sits beside, see what is an order management system and what is headless commerce; for the platform decisions that can carry it along, what buyers wish they knew before replatforming.
Common questions
What is ecommerce fraud prevention software?
Ecommerce fraud prevention software screens online orders before they ship, deciding which to approve, decline or send for manual review, so a merchant avoids paying for fraudulent orders and the chargebacks that follow. Dedicated vendors such as Riskified, Signifyd and Forter do this as a service; payment processors and platforms such as Adyen, Stripe and Shopify include their own screening. The same label is also used for bot and ad-fraud protection and for identity fraud in financial services.
What is the difference between a dedicated fraud vendor and a payment processor's fraud tools?
A dedicated fraud vendor reviews each order and decides whether to approve it; some offer chargeback guarantees on eligible approved orders, with fees and coverage set by the agreement. A payment processor's or platform's built-in screening flags risky payments as part of the service the merchant already uses. In these interviews dedicated vendors and built-in screening appear about equally often, and no buyer names both as their fraud solution, though payment and fraud controls can operate together.
What is a chargeback guarantee?
A chargeback guarantee means the fraud vendor covers the cost if an order it approved turns out to be fraudulent. Buyers describe it as the core of the dedicated model: you pay a percentage of each order, the vendor checks it, and if it approves the order it guarantees it against chargebacks. Coverage depends on the product and the contract, and payment processors offer chargeback protection of their own under specific terms. One buyer calls much of the category fraud insurance.
Does fraud prevention software block good customers?
It can, and buyers watch for it. False declines, where a genuine customer's order is rejected, are a recurring concern, and buyers measure approval rates alongside chargebacks. Several describe dedicated tools as black boxes that declined legitimate orders they could not explain, including orders placed by their own sales team; others worry about customers who travel or ship to a different address.
Who buys ecommerce fraud prevention software?
Mostly ecommerce and digital leaders, like most commerce software, rather than finance or risk teams. Companies using a dedicated fraud vendor are spread across sizes, about in line with the companies interviewed overall, and several buyers say another team owns the fraud tool or keeps its details close.
Which fraud prevention tools do ecommerce companies use?
Dedicated vendors named in these interviews include Riskified, Signifyd and Forter, each rated around 8 on a ten-point scale by the buyers who rated them, plus Kount and NoFraud. Many companies instead use the screening built into Adyen, Stripe, Shopify or CyberSource. For bot and ad-fraud protection, buyers name different tools altogether.
Do you need a dedicated fraud vendor if you use Shopify or Adyen?
Not necessarily. Some buyers say their processor's built-in screening catches what they need, and the companies in these interviews that dropped a dedicated vendor did so when they changed platform or processor. Buyers who keep a dedicated vendor point to the chargeback guarantee and to built-in tools missing fraud. The case depends on order values, chargeback exposure and how many good orders are being declined.
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