Fraud protection extends to bank debits

Stripe reports a 40% year-over-year increase in noncard payment volume. That growth has pushed the company to expand its Radar fraud prevention service beyond cards to cover ACH and SEPA transactions, which present a different risk profile than card payments.

The core challenge with bank debits is timing. Settlement can take up to four days, versus near-immediate confirmation for cards. During that window, a business that has already shipped goods or delivered services faces the risk of a failed payment and lost revenue. To address this, Stripe has built new AI models for ACH and SEPA using the same architecture that powers Radar for cards. Early adopters including Xero, Jobber, and FreshBooks are already using the new models, with average reported fraud reductions of 20% for ACH and 42% for SEPA.

New signals for asynchronous payments

Card fraud prediction relies heavily on instant payment confirmation, a signal that simply doesn't exist for bank debits. Stripe engineered hundreds of new features specifically for the asynchronous nature of ACH and SEPA transactions. These include:

  • Average order value, which tends to be higher for direct debits than card payments
  • A bank's historical payment success and failure rates

The models use these signals to calculate the likelihood that a transaction will fail and automatically block high-risk payments.

Custom rules and risk thresholds

Radar for ACH and SEPA goes beyond the default AI models. Merchants can write custom rules using new attributes tailored to these payment methods. For instance, a rule can block a specific bank account routing number that has previously been associated with fraud. Payment method attributes also allow customization of default block and allow lists, and merchants can set independent risk thresholds for cards, ACH, and SEPA.

Automatic rollout and what's next

Existing Radar users get ACH and SEPA fraud protection without any configuration work. Since Radar is built into other Stripe products like Checkout and Connect, the protection extends across all payment surfaces.

Stripe says its next focus for Radar will be supporting additional fast-growing payment methods with high fraud rates, and building custom tools for those specific fraud vectors. No timeline or method list has been announced yet.