Company: RSKD
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001851112-25-000006
Chunk: 17

Company: RISKIFIED LTD.
Filing Date: 2025-03-06
Form: 20-F
Item: Item 3
Chunk 17
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. The fee we charge our merchants is a risk-adjusted price (based on a variety of factors including historical fraud levels, approval rate commitment, industry vertical and geographic region), which is expressed as a percentage of the GMV dollars that we approve. We expect we may need to change our pricing models and pricing structures from time to time, including as a response to updates or enhancements to our product suite, and in response to changes in global economic conditions, competitive pressures, and trends or reductions in our merchants’ spending levels generally. Any changes to our pricing models or pricing structures resulting in decreased revenue from, or loss of, any merchant, could negatively impact our business operations and financial performance.

Through our Chargeback Guarantee product, we provide a Chargeback Guarantee to our merchants for transactions that our AI-powered ecommerce risk intelligence platform approves that are subsequently determined to be fraudulent and for which a valid chargeback reimbursement request is received by our merchant. Pursuant to our Chargeback Guarantee, we may be required to issue a significant amount of credits to merchants. The credit issued via the invoice we provide to our merchants generally equates to the approved transaction amount, which exceeds the fee we charge for the associated transaction. This business model requires us to accurately predict the amount of credits we expect to issue in order to determine the appropriate pricing structure for our products, and failure to do so may negatively affect our financial condition. While chargebacks are intended as a consumer protection mechanism from fraudulent transactions, they are also susceptible to abuse and “friendly fraud”. For example, friendly fraud may occur when a consumer, rather than returning an order they are dissatisfied with, instead initiates the chargeback process to avoid a complicated returns process. Friendly fraud may violate the merchant’s cancellation policies and, depending on the jurisdiction, may also be unlawful. Nevertheless, to the extent a chargeback reimbursement request is received by our merchants, even in instances of friendly fraud or other chargeback abuse, we may be required to issue significant credits to our merchants in respect of these transactions. In addition, the increasing availability and adoption of generative artificial intelligence

tools and other emerging technologies by fraudsters is changing the way that fraud, including friendly fraud, is perpetrated. While we employ a variety of strategies to minimize our exposure to friendly fraud and other chargeback abuses, it is often difficult to differentiate friendly fraud and other chargeback abuses from “true” fraud. Any increase in chargeback abuse, including friendly fraud, may impact our ability to accurately predict the amount of credits we expect to issue in order to determine