In today's digital world where individuals can get what they want at the single click of a button and where same-day delivery exists, consumers increasingly demand access and convenience. However, the danger is that fraudsters can easily go through card-not-present transactions without detection until after the crime has been committed. The greatest challenge for payment service providers in is striking the balance between the two: security for the merchant and convenience for the consumer.
Making it easier for customers to buy will certainly improve the user experience - a known factor in determining customer loyalty - however, when it comes to prioritisation security of course comes first.
Consumers hate friction
Cart abandonment rates have been reported to be as high as 77% for some online retailers which equates to a huge amount of missed potential revenue and other sources state that eCommerce merchants might be missing out on up to 42% of sales due to checkout friction. Considering the amount each customer would have spent on average, even small improvements in the user experience could have huge impacts on revenue.
Payment providers typically have a suite of fraud tools used at different levels during the transaction process. However, these are often limited to very black and white triggers which either allow or block a transaction.
While these tools can effectively reduce fraud, the haste at which they act to block fraudulent transactions can result in accidentally blocking good ones too. This means that a significant number of ‘good’ customers are being prevented from transacting, carrying with them a huge amount of potential revenue that the merchant misses out on.
Not only are 'good' customers being rejected, many are dropping off due during the process. Consumers clearly are keen to avoid risk of fraud, with 56% of consumers saying they are happy to accept whatever measures it takes to eliminate fraud, however this still leaves 44% that are unhappy with the additional friction.
How to strike the right balance
Finding a solution that can address the issue of fraud and minimise friction in the user journey can be a difficult task.
PROFILE works by connecting to the consumers digital footprint during the checkout process and analysing their data in real time to supplement traditional data sources in the identity verification processes. With the added benefit of smoothing out the customer journey with form pre-fill, PROFILE provides a robust and proven solution for verifying identity and reducing fraud, so that you can accept more good transactions while minimising fraud rates.
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