CIOIN

Virender Pal

CTO, Spicejet

Executive summary

SpiceJet is operating under fierce competition and online payment frauds became have become rampant. CyberSource's Decision Manager, an automated online risk management solution has helped Spice Jet to automatically evaluate credit card transactions in real time.

Prajapathy isn't an isolated case. Unconfirmed reports suggest that credit card fraud went up by 28 percent in India in 2008. Like every other airline, SpiceJet had equipped itself to screen credit card transactions, but it lacked a foolproof process to verify online transactions. It's solution came in the form of a four member Fraud Control Unit responsible for manually screening transactions made on SpiceJet.com.

SpiceJet is now India's second largest low cost carrier in terms of market share. However, getting there wasn't easy given that the airline operates in an increasingly cluttered segment. The landscape was too small for so many players and this had sparked off a price war the likes the country had never seen before. But their low-fare pricing model ensured that the low-cost operators survived on razor-thin margins, suddenly making losses from fraud significant enough to garner CXO attention.

Alarmed by the increase, SpiceJet decided to put risk on its radar. It was necessary that they enhanced customer experience with realtime verification of credit card transactions to alleviate any security fears. The thrust was on making SpiceJet.com a secure place for credit card transactions. Spice Je t then approached IT for help. After deliberation they finally opted for CyberSource's Decision Manager, an automated online risk management solution. The company has a huge dynamic and real-time database of credit cards and this solution is being used by over 20,000 organizations (like Jet Airways and the Future Group) across the globe.

With Decision Manager on board, SpiceJet can now automatically evaluate credit card transactions in real time. Based on a combination of rules framed by the airline and a set of over 150 parameters, the system decides whether a transaction should be processed further or sent for a review.

By running Decision Manager, SpiceJet. com is now able to almost single handedly estimate whether an online purchase should be accepted, rejected, or reviewed. But, the application was not given veto power. The project went live in October 2007 and effectively handled the gravity of the situation.

The solution brought with itself a whole set of benefits. The automatic screening of credit card transactions reduced the organizational burden of manual intervention. "Post-implementation we screen only those transactions that need to be reviewed. We don't have to deal with accepted transactions. So now we handle only about 400 transactions in a day as opposed to about 2,500 prior to the implementation," says Kumar, the head of the fraud control unit.

The solution has definitely impacted customer experience but only in a positive way. "Nothing has changed for the customer except that our website has become a more secure place to transact. Now he knows that his credit card can never be misused at SpiceJet.com. The solution has not only enhanced the sales effectiveness of our website but has also inspired confidence in our customers," says Raje. Plus, it makes it easier for SpiceJet to go international. "Our system is now equipped to handle both international and domestic credit cards.

This solution would lend support to its expansion plans in future. "I think we did it the way we wanted to. A different method could not have been better," says Pal. A robust and flexible system that ensures secure transactions and a step a few feet above competition - Pal couldn't have asked for more.