Fraugster, an artificial intelligence-based anti-fraud company, has launched a new product targeted at buy-now-pay-later (BNPL) and enterprise merchants.
Alternative Credit Decisions is aiming to increase approval rates, reduce credit bureau costs and provide region-specific insight to its customers.
The launch comes at a time when BNPL providers are reporting high levels of bad debt and losses.
Alternative Credit Decisions gives a more accurate picture of a buyer’s true credit risk by including more than 100 data points such as purchase history and unpaid amounts, and can help providers approve more customers but without increasing the risk.
“Our mission is simple, we want our customers to feel confident that they can trust the person they are approving to repay the amount they are borrowing,” said Christian Mangold, chief executive officer of Fraugster.
“The positive results we are already seeing with trial customers make me confident that we can help the e-commerce ecosystem approve more customers without increasing exposure to loan defaults.”
By reducing the need for running credit bureau checks, Alternative Credit Decisions is expected to save costs and improve accuracy as well.
The BNPL market is forecast to grow to $4tn (£3.18tn) by 2030, according to a recent report from cloud banking platform Mambu. It has become particularly popular for former peer-to-peer lenders like Funding Circle and Fellow Finance, which have started offering their own products.
Zopa is also set to launch its own offering soon.