Online purchasing represents a very important part of the European economy. However, the EU fell short of its target aiming for 33 % of SMEs to be selling online by 2015, reaching only 18 % at the end of 2016. The EU-funded PAYPLUG LABS project aimed to help European SMEs sell online by developing an improved online payment system. “The project targets European SMEs who wish to offer online payments but struggle with existing payment systems that are complex and expensive to implement, and vulnerable to fraudulent transactions,” says Camille Tyan, co-founder and CEO of French SME PayPlug and PAYPLUG LABS project coordinator. Project work resulted in a next-generation payment platform that offers advanced payment features but remains simple to integrate. “We focused particularly on developing innovative fraud detection tools that can protect online merchants from fraudulent transactions and enable PayPlug to register new merchants securely and rapidly,” elaborates Tyan. Focus on security for merchants To achieve its aims, PAYPLUG LABS developed and extensively tested a core Application programming interface (API) with advanced payment features such as one-click payments, responsive payment pages, billing management and direct integration with banking streams. It then enhanced fraud detection by developing a machine-learning fraud detection model that can evaluate the risk that a transaction is fraudulent, dubbed the Smart 3D-Secure tool. “The tool enables merchants to ask for confirmation of the transaction by SMS, depending on the risk of each transaction,” explains Tyan. “The feature reduced fraudulent transactions by 50 %, while merchants saw an 8 % increase in conversion rates,” he adds. PayPlug can also rapidly detect fraudulent merchants, offering one of the fastest activation times on the market for legitimate SMEs. One of the features of 3D-Secure is that it offers merchants the opportunity to define safety rules, such as “if the purchase is worth more than 100 euros or if it is made from a country outside of the EU,” illustrates Tyan. The tool is based on evaluation of the risk associated with each transaction as well as on the personal preferences of a merchant. Based on the calculation of fraud risk, a merchant can decide to activate 3D-Secure for anywhere between 20 and 80 % of the most risky transactions. More and more SMEs benefiting from PayPlug The project’s results have already enabled PayPlug to bring innovative payment features and fraud detection to hundreds of SMEs that wish to sell online. “Since the launch of the project, the number of active PayPlug merchants has increased by 500 %,” says Tyan proudly. He highlights that the project’s development “provides European SMEs with a solution for selling online that is adapted to their needs.” Through continuing roll-out of its SME payment solution, PayPlug has already spread beyond France to Spain and Italy, with new EU markets currently being targeted. The volume of payments processed by PayPlug has more than doubled between 2016 and 2017, successfully increasing the number of European SMEs that can benefit from the digital economy and from e-commerce solutions.
PAYPLUG LABS, SMEs, online payment, fraudulent transactions, e-commerce, online purchasing, fraud risk