Risk Decisioning

There are two main stages of our risk decisioning:

Type	Evaluation	Customer Journey Stage	Can be overriden by Merchant Limits?
Credit Risk	Will this Customer be able to pay this invoice?	Payment Offer creation	✅
Fraud Risk	Is this Customer who they say they are, or are they acting suspiciously?	Deferred Payment creation	❌

The statuses of objects as a result of this decisioning is shown in the below diagram.

Credit Risk decisioning

Credit risk decisioning is enabled by default for all our merchants, whereas fraud risk screening is optional. If in your application the likelihood of fraud is vanishingly small, speak to your Customer Success Manager to have fraud decisioning disabled.

You can exceed the credit limit set by our credit risk decisioning engine by setting a Merchant Limit. Hokodo will protect the portion of the order covered by our credit risk decisioning engine. The portion of the order above that is accepted at your own risk. The Merchant Limits are the mechanism for you to manage your exposure to that risk.

Fraud Risk decisioning

This is enabled for most merchants, but some merchants choose to opt out. This can be configured by your Customer Success Manager.

Improving risk decisioning

Your historical buyer data can help Hokodo make more accurate risk decisions and reduce friction for your buyers at checkout. This may increase the credit offer rate and decrease the probability of a Deferred Payment going to the Pending Review in the fraud process.

This historical data can be shared at order creation, in the order object's metadata field.

The field should be submitted as a set of key-value pairs. We recommend the following fields to be shared; if you believe there are other data points that may support Hokodo’s risk assessment, you can share additional data. Please provide a description of the business logic to your Customer Success Manager.

metadata field	type	description
subscriber	boolean	whether the buyer pays a monthly fee, eg. for any extra services
buyer_id	string	the unique identifier of the buyer on your platform
channel	string	the channel the buyer was acquired via (e.g. search engine, social media, referral, etc.)
checkouts_count	integer	the number of checkouts completed by the buyer to date, excluding Hokodo orders
checkouts_value	integer	the value of checkouts completed by the buyer to date, excluding Hokodo order