Lenddo in talks with e-commerce cos to tackle cash-on-delivery fraud

Lenddo, a fintech that uses non-traditional data for credit scoring, is in talks with multiple e-commerce companies to provide preventive solutions around cash-on-delivery (COD) frauds, its Chief Technology Officer Naveen Agnihotri has said.

“We are looking to help e-commerce companies in India conquer COD frauds by offering our scoring as well as online verification solutions,” Agnihotri told BusinessLine here.

COD-related frauds are the biggest bugbear for the e-commerce industry with estimated 40-50 per cent of the COD transactions resulting in problems or frauds.

E-commerce players are compelled to persist with COD as it accounts for the largest chunk of their business. Not offering COD in a cash-based economy like India could even mean their going out of business here.

“E-commerce companies are not lenders but they would love to offer customers loans through a bank or NBFC at the exit point of the transactions. These e-commerce companies are now trying to dip their toe into some sort of assessing their customers from lending perspective,” Agnihotri said.

Lenddo’s scoring model is different from other credit scoring agencies like CIBIL, which mainly use previous financial history data to assess creditworthiness.

As a non-traditional data-based scoring company, Lenddo — whose solutions are used in 16 countries — uses online behaviour, mobile devices data and social media data to arrive at a “behavioural” or “character score”. The data are sourced only after opt-in permission is obtained from the applicant.

This Lenddoscore — the main product — is typically added to an existing scorecard by traditional lender (bank or NBFC) and integrated real time with their credit decision platform. Clients then use the information as a key variable in the credit underwriting, better pre-screen applicants or become more efficient at targeting potential customers.

“In our scoring model we are trying to gauge their (borrower/customer) behavioural pattern and assess their creditworthiness a broad way. What is the likelihood of default of this person?. Is this person likely to repay an obligation?”, Agnihotri said.

Already, Lenddo has some top notch private banks in India as its clients for the scoring services. Now, this company is in talks with a large public sector bank for offering Lenddoscore, he added.

Agnihotri said that Lenddo is also in talks with several credit information companies in India for collaborative approach so that a comprehensive “combined” offering (using both previous financial history and non traditional data like social data and mobile data) could be offered to clients.

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