From First-Time User to Trusted Device: Rethinking Risk for Repeat Transactions

In the world of payments, trust is built in milliseconds. A returning customer shows up at checkout, but to the payment gateway, they look like a complete stranger. The browser’s fresh. The cookies are gone. The merchant might be new, but the device isn’t.

Yet, in most systems, none of that matters. The result? The transaction is treated like a first-time interaction, and the risk logic resets.

This is one of the core challenges plaguing payment service providers (PSPs) and gateways today: a lack of persistent device intelligence. Without long-term device memory, platforms are forced to make risk decisions with short-term signals — often no more reliable than flipping a coin.

Why Persistent Device Identity Matters

Most device intelligence today relies on cookies, session fingerprints, or soft device ID signals like user agent strings and IP addresses. These methods are fragile. They break across incognito sessions, disappear with privacy extensions, and degrade over time.

And crucially, they don’t travel well across merchants.

For platforms operating across a network of merchants, this presents a huge blind spot. A device that transacted safely with Merchant A last quarter is invisible to Merchant B today. That’s not just a technical flaw - it’s a missed opportunity to make smarter, lower-risk decisions.

Persistent device identity solves this by offering continuity. It gives gateways and PSPs the ability to remember a device across time and context, even if the merchant changes or the session is long gone.

This continuity opens the door to better risk scoring, fewer unnecessary challenges, and more confident transaction routing.

The Hidden Costs of Stateless Trust

When platforms can’t retain long-term device intelligence, every transaction is judged in isolation. That leads to:

• Overly aggressive risk rules, triggering false positives and unnecessary declines
• Redundant 3DS challenges, increasing friction for returning users
• Suboptimal rail selection, because risk signals aren't strong enough to justify using faster, cheaper options

Recent data underscores just how costly false declines can be. According to PYMNTS, U.S. eCommerce merchants lost an estimated $81 billion in 2023 due to false declines (source). Globally, these mistaken rejections are estimated to cost businesses over $443 billion annually (source) — a number that dwarfs actual card fraud losses.

And it’s not just about lost revenue. One study found that 42% of consumers who experience a false decline will boycott the retailer altogether (source). That’s a lifetime customer, gone because the system didn’t recognize their device.

Now imagine if a returning device - even one seen six months ago - could be recognized with high confidence. You could reduce friction for good users while preserving strong fraud defenses. That’s the power of persistence.

A Device That Can Be Trusted Over Time

At Ideem, we've been thinking deeply about this challenge.

Rather than depending on temporary markers, we’ve built a device-bound trust layer that creates a durable cryptographic relationship between a device and a merchant, one that’s not tied to cookies, sessions, or local storage. Even if a user clears their browser or comes back after months, the system can confidently verify: this is the same device we saw before.

More importantly, the same intelligence can be extended across the platform allowing PSPs to make smarter risk decisions based on the full history of a device, not just what’s visible in the moment.

Persistent device trust isn't just a fraud solution. It’s a foundation for better logic across the entire transaction pipeline from routing to authentication to authorization.

Looking Ahead

In an era of privacy-conscious consumers and increasingly complex fraud, it’s tempting to treat every interaction as high risk. But platforms that can distinguish familiar from unknown, even across time and context, gain a critical edge.

Persistent device intelligence isn’t about tracking users. It’s about building continuity in a space where memory is scarce.

And in the payments world, memory means trust.

Sources:

• PYMNTS: False Declines Hurt eCommerce Merchants
• Global Banking & Finance: The Lifetime Impact of eCommerce False Declines
• PYMNTS: 47% of Retailers Say False Declines Impact Customer Satisfaction

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