The shift to e-commerce has prompted a rise in online fraud, presenting merchants with the challenge of keeping their transactions safe without being overzealous with payment declines. A new partnership between fraud prevention company Forter and e-commerce platform FreedomPay aims to reduce the number of potential friction points, for a superior fraud-proof checkout.
In traditional e-commerce interactions, the transaction is touched by multiple players: the online merchant, the credit card issuer and the bank. These companies are all likely to deploy separate fraud tools, which can result in an increased chance of rejection for the customer. If this is done incorrectly, this poor experience can risk turning away a shopper from that business permanently, which can lead to long-term revenue damage.
This risk has increased in 2020, as more consumers have turned to online shopping. This has placed greater strain on the networks, which may opt for excess caution and greater rejection rates.
“Currently, transaction volumes for new online customers are two times greater than pre-COVID levels,” said Neil Smith, head of business development at Forter. “This presents tremendous opportunity for merchants to take advantage of new revenue streams and build strong customer lifetime value, but these new users are also 5-7 times more likely to get falsely declined.”
New visitors to an e-commerce website are particularly vulnerable to being falsely declined, due to the lack of information readily available about them. Often, in order to be cautious, this shopper will be declined at first try, which might encourage them to seek an alternative vendor. If this is repeated at scale, a brand or retailer could lose a substantial amount of potential revenue and undo the investments they’ve made towards customer acquisition.
Making a successful call on whether a transaction is fraudulent or not requires access to a lot of information – all in real time. The payment method itself must be scrutinized, in addition to the profile of the shopper, which is why many retailers utilize solutions that incorporate the latest in machine learning technology. Forter has processed $200 billion in transactions for over 800 million consumers globally, making its machine learning software particularly adept.
“Forter’s ability to analyze not only the transaction in real-time but also the persona behind the transaction leads to a far clearer picture of genuine transactions,” said Smith. “This leads to more trust between merchants and consumers, resulting in increased approvals and additional top and bottom line revenues for merchants and partners alike.”
With this new partnership, all merchant users of the FreedomPay platform will gain access to Forter’s fraud-prevention tool. By tapping into this network of 800 million shoppers, merchants can instantly verify customers that are new to them, but no to the broader network. There is no complicated integration necessary; the company reports that it can be up and running in a matter of days.
Describing the tool as not just a fraud-prevention solution but an “e-commerce business enablement technology,” Smith emphasized the importance of making the most of every online interaction – especially with brick-and-mortar seeing less traffic. By streamlining their checkout security features, merchants can confidently focus on customer acquisition and know that they can offer a positive purchase experience at the point of conversion.