Online retailers widely implement anti-fraud tools and strategies — but minimizing false declines while effectively screening out potential fraud is easier said than done. Payment service providers (PSPs) can be crucial in helping eCommerce firms find the right approach to these challenges. In fact, 86% of eCommerce retail firms receiving active PSP support reported a rise in profitability.
Latest data reveals that large online retailers widely overlook the direct impact of an effective anti-fraud toolkit on boosting profits. The stakes are high, with U.S. eCommerce firms projected to lose $157 billion due to false declines in 2023.
These are just a few insights explored in “Fraud Management, False Declines and Improved Profitability,” a PYMNTS Intelligence and Nuvei collaboration. This edition examines the intersection of fraud prevention and failed payments in eCommerce. It draws on insights from a survey conducted from Aug. 10 to Aug. 31 of 300 executives from online firms generating more than $100 million in annual revenue.
Nearly 9 in 10 online retailers have the technology to analyze the cause of failed payments. However, just 33% have implemented screening solutions to identify potential fraud as the cause, representing a missed opportunity to minimize false declines. Still, while a sizable share of these businesses have some screening capabilities, the average retailer could benefit by retooling anti-fraud capabilities.
Ninety-five percent of eCommerce firms are actively upgrading anti-fraud toolkits or plan to do so in the next 12 months. Just 16% of online retailers cite increased profitability as a benefit of stronger fraud management. Most eCommerce firms cite customer satisfaction and cybersecurity as benefits. This underscores a significant need for PSPs to deepen awareness of the benefits of collaboration with eCommerce clients.
Online retailers estimate that 11% of customer payments fail, on average, which can seriously impact sales. Nevertheless, 82% of firms say it is challenging to identify the cause of failed payments. Also, 18% cite this issue as the biggest challenge they face in mitigating failed payments.
Working with PSPs enables eCommerce firms to prevent fraud, identify causes of false declines and improve the payment experience more effectively. Download the report to learn how the right fraud prevention approach can minimize false declines and maximize profits.