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Keeping digital commerce on track will require global fintech collaboration

The following is a guest post by Roenen Ben-Ami, co-founder of

Without trust, commerce wouldn’t exist. That was true when early humans began trading stone tools 300,000 years ago, and it’s still true today in the era of digitalization.

But while the rise of eCommerce has revolutionized global trade, enabling people to buy and sell more efficiently than ever before, it has also brought new challenges that threaten to undermine the trust upon which our globalized world depends.

Digital transactions are, by their nature, hard to police and easy to abuse. A criminal who obtains stolen credit card details can readily pose as a legitimate customer: in 2020, “card not present” (CNP) fraud cost merchants a painful $19 billion worldwide. Cases of “friendly fraud,” which occurs when a card-based transaction is improperly reversed, are also increasing, costing businesses an estimated $125 billion

Together, these risks threaten to erode trust between buyers and sellers and constitute an existential threat to eCommerce operators and an impediment to the entire global economy. Fortunately, a solution is at hand: worldwide fintech and cybersecurity innovators are delivering new technologies capable of restoring trust and making international trade networks more resilient and sustainable in the digital era.

A global effort

As I told a delegation of German finance leaders during their 2022 visit to Israel, we can’t simply rely on distant tech hubs — in Silicon Valley or elsewhere — to solve these problems for us. Instead, we must join together and embrace innovation hubs worldwide to forge global solutions.

We’re already seeing that approach pay dividends when tackling CNP fraud. In 2008, for instance, PayPal bought Israeli startup Fraud Science for $169 million, folding the company’s technologies into its anti-fraud systems. Since then, we’ve seen Israel’s innovation ecosystem give rise to several fintech unicorns, including eCommerce anti-fraud pioneers Riskified and Forter.

Israel is a security-minded nation, and we’ve built one of the world’s most important hubs for cybersecurity research and development. We’re home to a third of the world’s cybersecurity unicorns. Now, we’re drawing on the same strengths that made that possible — skilled programmers and analysts, many trained in elite military intelligence units; a supportive ecosystem of VCs and investors; and a large pool of high-skilled immigrants who support our global growth — and leveraging them to create some of the world’s most innovative financial security and fraud prevention startups, too.

Crucially, Israel’s tech startups aren’t just building systems for their needs. They want to compete globally, and — to a greater degree than tech hubs in places like China and the United States — we’re inherently connected and outward-looking.


To fight CNP fraud, we’re teaming with businesses and governments in places like Europe, where regulators introduced the Revised Payments Service Directive, or PSD2, to set strict security requirements for electronic payments and the protection of consumers’ financial data. Under the new rules — specifically the Strong Customer Authentication (SCA) requirement — payment service providers must ensure strong customer authentication to initiate and process online transactions. 

In practice, this means wide use of multi-factor authentication (MFA), with shoppers required to prove their identity using multiple mediums.

Regarded by some as the most significant update to card payment security since the rollout of chip-and-pin, MFA is a game-changer for preventing CNP fraud.

Even in the United States, where policymakers have been less proactive, MFA catches on quickly. In the second quarter of 2021, 37 percent of CNP transactions in the U.S. had multi-factor protection, up from just 10% six months earlier.

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Collaboration is key

What can be done? Well, technological innovation will have a crucial role to play. Israeli fintech innovators are developing AI and data analytics solutions that can help merchants to mine transaction data and effectively contest dishonest chargeback claims.

Automated mitigation tools also free up sellers to focus on other priorities — such as strengthening customer relationships — without getting bogged down in complex disputes.

But as I discussed with the German finance officials, we’ve learned from fighting CNP fraud that startups can’t do this independently.

To push back against friendly fraud, we must build a global alliance of retail leaders, banks, and regulators pooling their expertise to design a better system that protects consumers but is far less vulnerable to abuse. 

Putting things right, in other words, will require a team effort, with sellers, financial institutions, startups, and policymakers mobilizing to address friendly fraud.

Israeli tech innovators are leading the way — now it’s time for other eCommerce and card-payment stakeholders worldwide to join the effort and leverage all the tools and technologies at their disposal to meet the chargeback challenge. 

  • Roenen Ben-Ami

    Roenen, co-founder and Chief Risk Officer of, is an expert in the field of payments and chargeback mitigation. Previously, Roenen led the Chargeback and Merchant Risk teams at the payments service provider Simplex, which successfully recovered millions of dollars a year. He also served for nine years in an elite military intelligence unit in the Israel Defense Forces, attaining the rank of captain and spearheading the creation of an innovative operations department focused on change leadership, human resource development, and risk management.