She experienced fraud firsthand. Now this founder is building a safer, smarter payments experience for all

In 2021, Lerato Matsio was thrilled to receive her first order for the silk loungewear brand she was selling online as a passion project from her home in Belgium.

As she prepared the order for dispatch, she took a few moments to slip a handwritten thank-you note inside the box holding the carefully wrapped sand-washed silk lounge set, which she then sent by FedEx to her maiden customer. All of which made her more upset when the buyer said the parcel had never arrived and requested a refund.

When she learned that the buyer’s husband had signed the delivery note, it began to dawn on her: Matsio had fallen victim to what’s known as friendly fraud,” a scam in which people demand refunds under false pretenses — and one that is growing fast in the e-commerce sector in particular. 

It was not the first time she had experienced fraud that year. Fraudsters had racked up multiple charges on her credit card in her home country of South Africa. So she decided to fight back.

Delving into the world of retail fraud, she quickly found that merchants and banks faced a blind spot. They had no way to access real-time information on fraudsters, who could be anyone from individuals testing their luck to syndicates brandishing burner phones and synthetic identities.

Always resourceful with her time, Matsio spent her maternity leave conceptualizing a solution to help plug the estimated $100 billion annual loss from friendly fraud, which can include claims that deliveries have been stolen by “porch pirates” or phony chargebacks over disputed subscription fees.

In fact, research by digital ID firm Socure shows that a third of Americans admit to committing friendly fraud, also called first-party fraud, themselves, with Gen Z consumers the biggest culprits.

The plan she dreamed up while nursing her newborn son eventually evolved into Trudenty’s Consumer Trust Network, which preserves consumer data privacy while letting companies share fraud risk data to pinpoint fraudsters. And not only that. “We’re also helping companies really know when they are dealing with a genuine, trusted customer, so that they can service them better,” Matsio says. For example, a more reliable customer might be offered instant refunds or more payment options, such as the ability to pay later.

When her maternity leave ended, Matsio decided to move on from her career at McKinsey, where she had enjoyed seven years and had her sights set on becoming partner, to focus on building her data-sharing network. The Techstars Berlin accelerator program accepted her in 2022. She was fine-tuning her concept when payments provider Worldline shared the opportunity with her to build a solution to combat rising return and refund fraud.

Trudenty, which Matsio developed along with co-founder Samruddhi Bhangale, now allows its customers to share data via privacy-preserving technologies (including data hashing and ephemeral data processing). And through its machine learning algorithms, the platform produces “signals” that spot trends in consumers’ activity that other customers can use to determine risk.

“We pull it all together into a 360-degree view of how consumers behave across the entire ecosystem,” Matsio says.

Retailers, banks and card issuers can use the consumer intelligence in Trudenty’s Consumer Trust Index to make informed decisions, in real time, about how they interact with customers to reduce losses and time-consuming investigations while improving experiences for trusted consumers. For example, a bank may refuse to issue cards to high-risk customers. Or a retailer may opt to ask certain buyers to collect from a depot rather than have items delivered.

With growing momentum, London-based Trudenty is testing its technology with customers in France and the U.K. and plans to expand to Brazil and the U.S. It recently joined Mastercard’s Start Path startup engagement program to focus on scaling up by connecting with more companies to weed out fraudsters and improve experiences for reliable customers. The company is also exploring the integration of Mastercard products and services to provide enhanced signals on consumer behavior.

To Matsio, eliminating the consumer visibility gap will ultimately result in a safer commerce and payments environment — a virtue she appreciates as both a consumer and a business owner.