Company: RSKD
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001851112-25-000006
Chunk: 75

Company: RISKIFIED LTD.
Filing Date: 2025-03-06
Form: 20-F
Item: Item 4
Chunk 75
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 the average transaction value we approve is less than $200. This means that unexpected chargebacks need to occur in large volumes to meaningfully impact our overall chargeback expenses. As of December 31, 2024, our portfolio of potential chargeback liabilities was diversified across a wide variety of industries, hundreds of merchants and millions of individual transactions. We believe this scale and diversity significantly reduces the likelihood of material unexpected chargeback expenses.

•Short-term durations provide rapid visibility: Our merchant agreements generally allow chargebacks to be submitted up to six months from the order approval date. Merchants are also typically required to notify us of an eligible chargeback within five days of becoming aware of a chargeback that occurred within this six month period. As a result, chargeback liabilities typically have very short durations. More than 90% of chargebacks are incurred within 90 days of the transaction date. This allows us to forecast the expenses associated with a new cohort of approved transactions at the same time. Furthermore, as we receive chargeback notifications from our merchants, we are able to decline similar future orders in real time.

Our Products

Our AI-powered ecommerce risk intelligence platform is comprised of multiple products that are all powered by the same automated decisioning engine. Chargeback Guarantee is our core product that is used by substantially all of our customers. Merchants typically use our other products, either individually,

or in combination with Chargeback Guarantee to overcome ecommerce pain points that are similar or adjacent to chargeback fraud and abuse.

OurChargeback Guarantee product automatically approves or declines online orders with guaranteed performance levels that vary by merchant. Our machine learning models analyze hundreds of attributes per transaction, generating accurate decisions instantaneously. Through our proprietary smart linking technology, we strive to accurately match transactions that occur on our network with other similar transactions that have occurred on our network across hundreds of variables per transaction. We guarantee the outcome of these decisions by assuming the cost of fraud associated with each transaction we approve. Simultaneously, we provide contractual minimum approval rates for our Chargeback Guarantee merchants that are often higher than the approval rates that these merchants were able to achieve prior to commencing work with us. Building upon this foundation, Adaptive Checkout further optimizes conversions by dynamically adapting each checkout flow based on real-time assessments, leveraging one time password, CVV check, or 3D Secure routing to ensure more good customers are approved without taking on additional risk. In addition, we have built a first-class Chargeback Management System, which is a key component of ourDispute Resolve product. This fully automated