Dutch fintech FERO Payment Science (FERO) has bagged $3 million in a seed round from US investment firm Coatue that recently backed Ramp and GoStudent, Volta Ventures, and Antler.
The investment will enable FERO to expand and enhance its unique online payment solution to tackle the $5 trillion of annual revenue merchants lose at the point of checkout. The company plans to build out its team across Europe and the US, and further enhance its product offerings to serve more retailers around the world.
Offers customised online payments
The current ‘one size fits all’ approach to the checkout experience and payment journey is a significant barrier to purchase conversion. As a result, it is reported that the majority of online shoppers who reach the checkout stage fail to complete their purchases.
Having witnessed how complicated payment processing has become at checkout for end-merchants, FERO was founded by Craig Savage and Maximilian van Boxel, ex-Mastercard executives in 2016. The company identified an opportunity to create personalised purchase preferences that would make it easier and more seamless for consumers to complete their payments.
FERO’s solution analyses each shopper, their behaviour and activity, to predict the likelihood of purchase completion. Through the sequenced application of segmentation, multi-classification prediction and reinforcement learning, FERO learns a shopper’s purchase preferences and delivers the most optimal payment experience. This includes individually customised payment methods and subsequent payment journeys like reducing the friction caused by 3D secure authentication challenges.
“As a payments data scientist, I was shocked when I started to uncover the level of abandonment during the checkout and payment journey. Today, upwards of 45% of customers place items in their shopping cart, but never finalise their purchase due to payment related issues. This translates to over $5.2 trillion of lost revenue per year,” said Craig Savage, Co-Founder and CEO, FERO Payment Science. “We founded FERO to help retailers deliver a more seamless and customised shopping experience to their customers.”
“While payment innovations have made transactions faster and more seamless, few solutions have looked at the behaviour of shoppers to understand why so many items are left un-purchased in the online shopping cart,” added Elena Sakach, Partner, Coatue. “It’s exciting to see the FERO team take a unique approach that leverages behaviour analytics to deliver purchase solutions that will improve the shopping experience and drive revenue for retailers.”
