Why Authentication Now Determines Conversion Rates

Watch more: What’s Next In Payments: Entersekt’s Dewald Nolte

The most important players in digital commerce are usually the ones consumers never see.

They work behind the scenes, building systems that keep authorization moving, eliminate outages and secure transactions even during the busiest shopping moments of the year. Delivering 100% uptime is a tough goal to hit. Meeting it consistently might be the most powerful competitive advantage in payments today.

Black Friday Needs Operations, Not Blackouts

With one of the business shopping days in the rearview mirror, Entersekt Chief Strategy Officer Dewald Nolte said the company prepared for Black Friday weeks in advance because interruptions in authentication can create instant revenue loss. “The Operations team is absolutely the unsung heroes,” he said, in the “What’s Next in Payments” series on (appropriately enough) “Unsung Heroes” in payments.

Success is defined by silence. “If you are really successful during that time, then nothing happens,” Nolte said. That means no outages, no panic and no last-second escalations from merchants or issuers. It also means no lost conversions due to authentication failures or slow challenge responses.

Nolte described a strategy built on planning and visibility. Entersekt spins up war rooms ahead of major retail days, scales processing capacity and keeps direct lines open with top processing partners so potential issues are identified at once. “We had 100% uptime this year,” he said.

Friction Lives in the Background

Most failed payments are not caused by consumer behavior. They come from authentication systems that cannot make a decision quickly. The risk scoring might be wrong, the device might look unusual, or data signals might contradict each other. All of that happens in the background, but it affects every conversion rate in digital commerce.

Nolte said the first challenge is seeing both sides of the transaction. Entersekt’s authentication platform gleans visibility into merchant and issuer data. A small shift in risk scoring at the merchant level can trigger alerts for issuing banks, causing confusion on both sides. The key is understanding when something is a pressing issue worthy of examination and when it is a passing anomaly. The most important capability is to “isolate something that is just a blip in the network versus something that is a real problem,” Nolte said.

Regulated and Unregulated Markets

Authentication flows are shaped by regulation, and that creates two very different types of digital markets. In highly regulated areas such as Europe, Nolte said there are “strong mandates in place” that drive multifactor authentication and higher consumer challenge rates. Too many challenges can slow payments down and increase abandonment. The work becomes helping issuers trust silent or frictionless authentication, where the consumer does not need to take an action but the bank still receives strong data signals.

In unregulated markets like the United States, the problem is different. Very few digital transactions use EMV 3-D Secure, at about 2% to 5%, he said. That creates a data shortage. Issuers do not get enough good transactions to train their models.

“If you send only bad transactions over the network, then it is almost a catch-22,” Nolte said. The solution is sending more quality data so banks know what good looks like. Better models lead to more approved transactions and fewer unnecessary challenges.

Data Quality Is the Real Difference Maker

Authentication and risk evaluation depend on device intelligence, behavioral analytics and repeat patterns. They are only as good as the data feeding them. Nolte said the key lesson is direct. “If you get garbage in, you get garbage out,” he said.

He offered up an example in which Entersekt was looking at international account data. Poor information made it appear that most transactions were coming from the United Kingdom when the issuer was based in South Africa. Better collection methods fixed the issue instantly, improving decisions and increasing genuine approvals.

Dashboard That Changes the Conversation

One of Entersekt’s major developments this year is a real-time dashboard that lets clients see trends develop with speed and accuracy. “You can see the trends in real time and you are able to then very quickly see if something happens,” Nolte said.

That transparency limits false alarms, helps customers understand problems without calling support centers and ensures faster action when something matters. It is a repositioning of authentication from hidden infrastructure to shared intelligence.

Authentication succeeds when it disappears. When models know what good looks like, fewer transactions get challenged. When dashboards provide visibility across issuers and merchants, support teams stay calm. And when data improves, authorization rates rise.

These are not headline stories. They are the unseen background decisions that determine whether a consumer keeps shopping or abandons a cart. Nolte said it plainly, with a mention of the consumer spending deluge that just happened after Thanksgiving: “What you want is a Black Friday and not a blackout Friday.”