SalesTechStar Interview with Reed McGinley-Stempel, CEO at Stytch
Reed McGinley-Stempel, CEO at Stytch talks about online commerce trends and what makes for better user experiences:
Tell us about yourself and more about Stytch
I am the co-founder and CEO at Stytch, a modern authentication company that’s focused on retiring the password in the next decade. We support all B2C and B2B companies’ core authentication needs today when building out sign-up + login flows (including the legacy method of password-based authentication), but Stytch is also the first company that’s built a platform for passwordless authentication, so that any application or website can embed passwordless sign-up and login flows. Stytch has had thousands of companies choose its software to eliminate the security and user experience shortcomings of password-based authentication. With Stytch, companies can offer users a more secure and delightful experience while also driving higher conversion rates at onboarding and login, creating significant economic upside for these businesses.
Myself and my Co-founder, Julianna Lamb, are building the product that we wish we had when we were working on authentication at our previous employers, Plaid, and Very Good Security. We build easy to integrate and flexible APIs so that developers can focus on building their core product while we do the heavy lifting when it comes to authentication.
How is bot fraud affecting the online marketplace as a whole today and what can brands/ecommerce retailers do to try and reduce its impact?
According to the annual Bad Bot Report, only 62.1 percent of web traffic is generated by actual humans—the rest is bots. These bots steal credit card numbers, customer login details, and personally identifiable information (PII) and commit automated fraud attacks. To combat this traffic, ecommerce companies have been relying on the use of CAPTCHAs to distinguish between humans and bots. However, traditional CAPTCHAs cause a lot of friction that can reduce conversions significantly.
Also, CAPTCHA systems are not solving the problem due to CAPTCHA fraud. Every CAPTCHA system today exposes its public key, making it easy for bots to scrape and submit the public key to a “CAPTCHA-solving-as-a-service” company, commonly referred to as a CAPTCHA farm, where people manually solve CAPTCHA tests for bots for a living. As a result of bots being able to solve CAPTCHA challenges, bots can create fake accounts, spam boards, scoop up inventory before humans, and other negative consequences.
How can ecommerce retailers use improved methods to ensure that legitimate customers are interacting with the brand?
We’ve introduced Strong CAPTCHA, which completely removes the public key site from the CAPTCHA architecture, leaving users with the same exact experience, but making it impossible for bots to scrape and mass attack applications. The solution enables ecommerce businesses to interact with legitimate customers. It also cuts costs for businesses in the form of fraud, wasted resources, and time. We also offer advanced device telemetry detection to passively detect whether someone on your site is a real user or a bot.
Can you talk about some of the most recent incidents of bots affecting ecommerce players and the impact these had on the market?
The one that’s received the most fanfare in recent weeks is the Ticketmaster sale of Taylor Swift tickets, where bots overwhelmed Ticketmaster’s ticket system in an attempt to purchase and then resell those tickets at a higher price. As a result, most real fans came away disappointed and frustrated that there wasn’t a fair chance to buy tickets. This has sparked outrage and attention from even the Senate and regulators like the FTC for the role that bots play in distorting commerce online.
A few thoughts on the future of the online ecommerce industry.
Online commerce presents many advantages over brick-and-mortar, particularly for those of us that want the convenience of shopping from home. But one area where it still lags behind offline commerce is the friction of walking through the front door. When a user lands on an ecommerce website, they’re inundated with stimuli and friction – (they’re asked to accept these cookies, create an account with multiple fields required, and remember yet another password).One of the big opportunities in the next few years is to give good users as seamless of an experience walking through the front door as possible while making it impossible for bots to distort the commercial experience for consumers.
At Stytch, we’re excited to see more ecommerce companies adopt low-friction passwordless authentication to let good users in and low-friction bot prevention like device fingerprinting and Strong CAPTCHA to keep bad users out.
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