Community Research and Development Information Service - CORDIS

H2020

PAYPLUG LABS Report Summary

Project ID: 666287

Periodic Reporting for period 2 - PAYPLUG LABS (Next generation online payments and fraud detection API for European SMEs)

Reporting period: 2016-04-01 to 2017-01-31

Summary of the context and overall objectives of the project

The EU has stated that the number of SMEs selling online must increase to enable Europe to meet its economic growth targets and create jobs. However, the EU’s target for 33% of SMEs to be selling online by 2015 was far from met – reaching only 16,7% at the end of 2015.

The PAYPLUG LABS project targets the two main barriers that prevent SMEs from trading online: the complexity of setting up online payments and concerns about credit card fraud. The aim of the project is therefore to enable more SMEs to efficiently and cost-effectively access the full potential of Europe’s burgeoning e-commerce market, by providing them with a simple and secure means of collecting online payments.

The project involves developing a next generation payment platform that offers advanced payment features but remains simple to integrate. It also focuses on developing innovative fraud detection tools that can protect online merchants from fraudulent transactions and enable PayPlug to register new merchants securely and rapidly. Developing secure systems and robust infrastructure are also key project priorities.

The project is carried out by a sole beneficiary, PayPlug, a French SME founded in 2012 with the aim of bringing online payment solutions to freelancers, micro-businesses and (via the PAYPLUG labs project), to Europe’s SMEs.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project began in June 2015 and is now two-thirds complete. Strong progress has been made across all work packages and the project is already generating significant results in our target markets.

The payment platform now includes key features, including payment pages that can be hosted directly within an SME’s existing website and the possibility to offer one-click payments to an SME’s repeat customers without needing to store credit card details locally. Most significantly, we developed a major new feature that is unique on the market: Smart 3DS. This feature makes it possible to launch a 3-D Secure protocol (validation of a payment via SMS) based on the risk score of each transaction. As a result, PayPlug clients have seen their conversion rates increase by 8% and the number of fraudulent payments halved. As stated by one of our SME merchants: “The Smart 3DS is a highly effective feature, which simplifies the payment process and has a direct impact on our sales”. This feature is made possible thanks to our extensive research into detecting fraudulent transactions.

The project work has enabled us to continue our fraud detection research: we have enriched our unique machine learning model both with a large dataset of PayPlug users, as well as with external transaction data provided by a major business. Our results continue to surpass those of traditional fraud detection models.

Finally, the robustness of our approach and the high security standards obtained have been validated by key external bodies: since the beginning of the project, PayPlug has been awarded a PCI-DSS level 1 (international standard for handling card data) and a pan-European Payment Institution License, authorizing PayPlug to manage transactions directly with a bank acquirer.

Since the beginning of the project, PayPlug’s team has grown from 9 to 25 staff and revenues have continued to grow rapidly, both in France and in other EU countries. PayPlug has communicated widely on the project progress both via its blog and in the media.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The technical challenge at the heart of our project is the provision of advanced payment features and fraud protection via a simple and rapid-to-implement solution that can be used by any developer. This gives any SME the opportunity to begin trading online.

We are currently the only European payment provider offering businesses the possibility integrate a payment page directly to their website, without needing to manage complex security and payment processing systems locally. Based on data from our fraud detection algorithms, we have created our unique fraud management tool: Smart 3DS.

The quality of our research programme into fraud detection has attracted the attention of larger organisations – and a major business provided us with their payment data in order to test the pertinence of our approach on a larger dataset. It has been possible to validate our approach’s capacity to surpass traditional fraud detection models both with generic fraud patterns (that target our SME merchants) and with fraud patterns specific to large businesses – that are often targeted by highly “professional” fraudsters.

The project is already meeting its objectives for social and economic impact. Market feedback has shown that SME merchants choose PayPlug for two key reasons: the integrated payment pages and our fraud protection tool, Smart 3DS. The project results are therefore already driving the rapid growth of our business and contributing to the number of SMEs choosing to sell online thanks to a simple solution that can protect them from fraud.

Thousands of merchants now use PayPlug to manage online payments, processing 2x more transactions on our platform in 2016 versus 2015.

Related information

Record Number: 190039 / Last updated on: 2016-11-03