Payment intelligence firm AI Fraugster has rolled out a new program, Alternate Credit Decisions, to enable merchants to Buy Now Pay Later (BNPL) and get more customers without incurring more credit risk, according to a press release Wednesday, May 18.
This is necessary because BNPL vendors report higher bad debt write-down rates than credit cards, the statement said.
There is also a wave of consumers facing denials of service because BNPL providers and e-commerce companies are unable to accurately determine risk.
Alternate Credit Decisions is designed to enhance BNPL scoring models with over 100 attributes, giving an accurate picture of a buyer’s true credit risk.
This comes with “very valuable” points like transaction history, account history, purchase history and outstanding amounts.
“Our mission is simple, we want our customers to feel confident that they can trust the person they approve to repay the amount they borrow,” said Christian Mangold, CEO 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 payment defaults.”
See also: Square Adds Afterpay BNPL In-Store POS Integration
BNPL is growing in popularity, with Square using its acquisition of Afterpay to add more features for in-person shopping.
In-person Afterpay buyers will now be able to use a mobile wallet, containing their virtual Afterpay card, at the point of sale and access installment payment options.
According to the report, sellers will be able to profit from their sales immediately.
Square says buying Afterpay has helped it get new customers and increase revenue.
The company says sellers using Square Online have seen more deal sales and buyer growth.