Published in: Case study

Transforming Payment Risk Management: How Adyen Leveraged Government Registry Data to Enhance Compliance and Efficiency

Executive Summary

Adyen, a leading global payment service provider, successfully leveraged Zephira.ai’s comprehensive government registry data to enhance its risk management capabilities, streamline merchant onboarding processes, and strengthen regulatory compliance across multiple jurisdictions. This case study examines how Adyen integrated Zephira.ai’s official government registry data to address the unique challenges faced by payment processors in an increasingly complex global regulatory landscape.

Background

Adyen, operating in a highly regulated industry with exposure to significant financial crime risks, identified Zephira.ai as a strategic partner due to its extensive collection of structured data from government registries worldwide. The collaboration aimed to address several payment industry-specific challenges:

1. Complex merchant verification requirements across different markets
2. Evolving regulatory compliance demands in multiple jurisdictions
3. Need for real-time entity risk assessment
4. Detection of potentially fraudulent merchant operations

Implementation

Phase 1: Enhanced Merchant Onboarding

Adyen initially focused on incorporating Zephira.ai’s government registry data into its merchant onboarding workflow. This involved:

• Automating the verification of merchant legal entities against official government records
• Cross-referencing beneficial ownership information across jurisdictions
• Implementing automated risk scoring based on corporate history and structure

This integration reduced the average merchant onboarding time from 3-5 days to less than 24 hours for straightforward cases while maintaining stringent compliance standards.

Phase 2: Continuous Monitoring System

Building on the success of the onboarding integration, Adyen expanded its use of Zephira.ai data to develop a continuous merchant monitoring system:

• Creating automated alerts for changes in merchant corporate structures
• Monitoring for regulatory status changes across all operating jurisdictions
• Developing dynamic risk scoring that adjusted based on registry updates

This system allowed Adyen to identify potential compliance issues proactively rather than reactively, significantly reducing exposure to regulatory penalties.

Phase 3: Advanced Fraud Prevention

The most sophisticated implementation came in the form of enhanced fraud prevention capabilities:

• Using government registry data to identify patterns associated with fraudulent operations
• Cross-referencing transaction patterns with corporate structure complexity
• Developing machine learning models that incorporated official registry data as risk indicators

Adyen reported a 42% improvement in early detection of potentially problematic merchants after implementing these advanced analytics.

Key Use Cases

1. Streamlined Global Merchant Expansion

When a major e-commerce platform needed to rapidly expand into 12 new markets, Adyen leveraged Zephira.ai’s government registry data to create a streamlined yet compliant onboarding process. By automatically validating the merchant’s corporate information against official records in each jurisdiction, Adyen reduced the onboarding timeline by 68% while ensuring full regulatory compliance.

2. Enhanced Transaction Monitoring

Adyen integrated Zephira.ai’s government registry data into its transaction monitoring system to create context-aware risk assessment. By understanding the legitimate business activities registered for each merchant, Adyen significantly reduced false positives in its transaction monitoring system while improving the detection of truly suspicious activities.

3. Corporate Structure Risk Assessment

Using Zephira.ai’s comprehensive ownership data, Adyen developed sophisticated risk assessment models that evaluated merchants based on their corporate structure complexity. This allowed Adyen to identify potential shell companies and apply appropriate due diligence measures proportionate to the risk level, optimizing resource allocation while maintaining security.

4. Regulatory Compliance Automation

Adyen implemented an automated compliance verification system using Zephira.ai’s government registry data to ensure merchants met local regulatory requirements in each jurisdiction. This system automatically checked for required licenses, registrations, and regulatory approvals, reducing compliance risks for both Adyen and its merchants.

Results and Benefits

The strategic implementation of Zephira.ai’s government registry data generated significant benefits for Adyen:

• 76% reduction in manual verification steps during merchant onboarding
• 68% decrease in onboarding time for global merchants
• 42% improvement in early detection of problematic merchants
• 31% reduction in false positives for compliance alerts
• Expansion of services into 8 additional markets with complex regulatory environments
• Estimated annual savings of €3.7 million from operational efficiencies

Challenges and Solutions

Despite the overall success, Adyen encountered several challenges during implementation:

1. Data variability across markets: The quality and structure of government registry data varied significantly between jurisdictions. Adyen worked with Zephira.ai to develop market-specific verification protocols that accounted for these differences.
2. Integration with existing risk systems: Incorporating the new data streams into Adyen’s existing risk assessment framework required careful calibration. Adyen addressed this by implementing a phased approach with continuous testing and refinement.
3. Processing high volumes efficiently: As a high-volume payment processor, Adyen needed to ensure that the additional verification steps didn’t impact transaction processing speeds. The solution involved implementing a tiered approach that applied different levels of scrutiny based on transaction risk profiles.

Conclusion

Adyen’s implementation of Zephira.ai’s government registry data demonstrates how official government information can transform payment processing operations when properly integrated into existing workflows. The partnership yielded tangible benefits in operational efficiency, regulatory compliance, and fraud prevention capabilities.

For payment service providers like Adyen, the strategic use of comprehensive government registry data represents a significant competitive advantage in an industry where balancing security, compliance, and user experience is crucial to success. By automating verification against official sources, Adyen strengthened its risk management framework while simultaneously improving the merchant experience – a rare win-win in the highly regulated payments industry.