LISNR Is Helping Food-Delivery Services Prevent ‘Friendly Fraud’


When LISNR entered the food-delivery marketplace late last year, it had no idea how important the industry would become.

The tech company, which started in 2012, uses near-ultrasonic sound to transfer data between devices. They’ve helped Fortune 100 companies create better customer authentication experiences. Now, as COVID-19 has consumers and restaurateurs relying on take-away, their move to food delivery couldn’t be more timely.

According to Jeff Hudson, the company’s head of marketing and growth, LISNR began navigating the delivery industry in late 2019 after analyzing how its Radius product could help delivery services avoid “friendly fraud”—the act of customers trying to gain back money from a legitimate transaction.

In the restaurant delivery world, this can happen when customers receive their food then falsely report that it never showed up. Without an authentication strategy, it’s the courier’s word versus the consumer’s — and the consumer usually wins. The figures average out to about $1.04 lost per delivery, according to LISNR data; that totals to upwards of $262 million lost per year. Now more than ever, this is a risk these companies can’t afford.

“This was a problem before, and now with more food deliveries going this route, it’s going to become even more of a problem,” Hudson said. “Typically a company like a Postmates would eat that cost, but our technology can help prevent this. We authenticate the identity of both people.”

Here’s how LISNR’s technology works: When the courier arrives, their device transmits ultrasonic audio with the customer’s device, authenticating they did in fact arrive and deliver the food, because the transmission has to happen within a few feet. If a dispute arises, companies and couriers can use this authentication to prove customers received their food.

This move is all part of LISNR’s push to further establish contact-less technology as the norm, Hudson says. Given the focus on sanitation stemming from COVID-19, he estimates the desire for contact-less payments and authentication will only rise. And, while food delivery is on fire right now, this offering will extend to other trending businesses like bikeshares and rideshares when the pandemic passes.

“With some rideshare companies, you give a pin as an extra authentication,” Hudson said. Uber tested this type of service in 2019 to expedite pickup at places like the Portland International Airport. Instead of matching with a driver, passengers receive a six-digit code, then get in line for the next available car. Once in the car, they share the pin with the driver and their destination and account auto-populates. LISNR could expedite this even further. “With our tech, you wouldn’t have to say the pin. The passenger’s phone speaks to the driver’s.”

LISNR is among the first to offer this kind of service, and they hope to be the underlying technology platform for authentication in the mobility sector within the next year, Hudson said.

And, given their track record includes recognition as one of CNBC’s top disruptors in 2019, recent investments from companies like Visa and its victories in this year’s Cincy Inno Tech Madness tournament, this bold goal isn’t just possible — they’re poised to make it happen.

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