Vonage Verify API: Vinted's Solution Against Fraud in Secondhand Clothing Marketplace
Technology Category
- Cybersecurity & Privacy - Identity & Authentication Management
- Robots - Wheeled Robots
Applicable Industries
- Retail
- Telecommunications
Applicable Functions
- Quality Assurance
Use Cases
- Fraud Detection
- Machine to Machine Payments
Services
- System Integration
About The Customer
Vinted is a rapidly growing Lithuania-based company with 20 million members around the world. It provides a social marketplace for pre-owned clothing, allowing users to unclutter their closets and make money by selling their unwanted clothes via an easy-to-navigate online retail outlet. Sellers create listings for their clothes, chat with interested buyers, and then complete easy online transactions. Vinted merchandise spans all demographics — men, women, and children — and sellers can choose to offer discounts. The app supports 52 million listings from across the USA, UK, Germany, Austria, France, Lithuania, Poland, Czech Republic, The Netherlands, and Spain.
The Challenge
Vinted, an online vintage retailer, was facing a significant challenge with an increase in fraudulent transactions on their site. Traditional methods of customer authentication were proving to be either ineffective or too cumbersome and unscalable. As the company grew, the simplicity of their transaction processes heightened the risk of fraudulent transactions, such as purchases made with stolen credit card information. Vinted had a security system in place that calculated user behavior and gave a score based on the probability of fraudulent usage. However, when a user was identified as fraudulent through a negative score, the only action Vinted could take was to ban the user. This approach was not efficient and Vinted needed a more frictionless action.
The Solution
Vinted decided to implement Vonage Verify API with two-factor authentication as a solution to their problem. This system verifies suspicious users via their phone numbers, using a fast, simple, and frictionless method of user authentication. Fraudulent users are proactively blocked from completing transactions. SMS verification was chosen as the best approach for this problem. It allows Vinted to flag suspicious behaviors at any point in the transaction by creating rules for monitoring different stages of the process. If a user triggers suspicion at any time during the process, that user is flagged and will not be able to continue the transaction until their phone number is verified. Verification only 'kicks in' for those transactions that have been flagged as suspicious. This approach gives the user the benefit of the doubt, and they are not banned unless they cannot be verified.
Operational Impact
Quantitative Benefit
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