Voice of the Industry

Another record-breaking holiday season will be underpinned by experience

Monday 22 November 2021 07:50 CET | Editor: Anda Kania | Voice of the industry

As part of our peak season series, Jason Howard, Executive Vice President at Ethoca, provides best practices into how to avoid card fraud when buying online, how to offer a better online experience, and how to prevent transaction confusion

All current trends point to 2021’s ‘golden quarter’, the shopping period lasting from Halloween to Christmas and encompassing Black Friday and Cyber Monday, being another record-breaker this holiday season. Mastercard’s Spending Pulse anticipates holiday ecommerce sales to grow 7.5% YOY, and 59.3% YO2Y, with in-store sales also expected to see a rebound – growing 6.6% compared to 2020. 

And while this growth indicates good tidings for retailers, there’s never a reward without any risk – and we’ll explore some of the key themes that will help make sure everyone has a happy holiday season. 

Everything will grow…including fraud

Black Friday is no longer an in-store only affair. With the rise of ecommerce and Cyber Monday, and the continued preference of consumers for omnichannel shopping options across mobile and online, digital will be a key component. More online transactions can also mean more fraud and chargebacks, with chargebacks expected to total USD 35 billion in 2021 alone, with approximately 80% of them being the result of fraud. 

And an uptick in chargebacks means that merchants will have to be more vigilant than ever in preventing them, with the best course of action being to stop them before they happen altogether. One way to do that is by getting alerts that inform merchants in real time when a customer has disputed a card transaction, but before it becomes an official chargeback - allowing merchants to stop the order from shipping or cancelling the service and issuing a refund, effectively resolving the need for a chargeback in the first place.

Omnichannel shopping adds complexity

It’s rare for customers to do all their online shopping at a computer while at home. Mobile sites, apps, curbside pickup and click-and-collect options are all becoming popular, which starts to blur the line between ecommerce and in-store purchases as many of them involve aspects of both. This adds a layer of complexity for merchants – both in needing to prevent fraud and thinking about their user experience from multiple angles.

Take for example curbside pick-up where the goods are collected in-person, but were purchased online, or an order for a peppermint latte placed in-store but through a mobile app. In these scenarios, although a portion of the transaction was face-to-face, it may still be considered a card-not-present transaction similar to an online purchase. The upside of digital and mobile payments is the ability to offer greater flexibility to customers in terms of how, when and where they shop. While security is baked into every transaction no matter how it’s made, merchants should take note of how their customers are paying and align their fraud and digital experience strategies to account for an increase in omnichannel options. 

Transaction confusion will mean more chargebacks

Most of us have likely seen a transaction on our bank statements that we couldn’t remember – a situation we often refer to as ‘transaction confusion’. It can sometimes lead to customers accidentally initiating a chargeback if they can’t place where the charge came from, since they may mistake it for fraud.

To solve this problem effectively, it requires providing more information when and where customers are having these doubts – and this is often in banking channels like online or in-app bank statements or contact centres. In fact, a study has found that 73% of cardholders call the issuer first when they question a charge, with one in four dispute calls the result of confusion over statement descriptors. With more people buying from ecommerce merchants than in previous years, this is likely to increase. 96% of customers also say that they want more detailed transaction information available to provide increased clarity. Therefore, a clear solution is providing customers with more detailed purchase information in trusted channels to help them better make sense of their purchase history. Luckily, merchants of all sizes can simply upload their company logos as a first step towards providing more clarity. 

Wrapping the entire experience up with a bow

No matter how customers shop – in-person, online, or a mix of both, they’ll be expecting a seamless experience no matter how they interact with businesses.

For merchants, this holiday season is shaping up to be another record-breaker. Understanding the different ways customers are expecting to shop, and how that will impact fraud and the customer experience, will be key to keeping the holiday season merry for all. 

Merchants won’t be able to do this with one tool alone, but they’ll have to tackle the problems from many angles and consider the whole of the customer journey, even beyond the payment stage. 

About Jason Howard

Jason Howard is Executive Vice President, Ethoca. Jason is responsible for the overall strategy and leadership of Ethoca, working across the business to further drive Ethoca's leading collaborative technologies that aim to minimize chargebacks, friendly fraud and build better digital customer experiences.  Having joined Ethoca in 2013, Jason has over 15 years of experience with high-growth organisholidayations from the fraud and payments industry. Prior to joining Ethoca, Jason led sales for a U.S. healthcare payments start-up Tango-Health and data breach remediation company AllClearID. Additionally, Jason spent six years at JPMorganChase where he had responsibility for expanding its commercial credit card business.

About Ethoca 

Ethoca is an award-winning provider of collaboration-based intelligence and technology solutions that empower businesses around the world to fight fraud, prevent disputes and improve the customer experience. Powered by the ever-growing Ethoca Network, our solutions provide rich intelligence throughout the customer purchase journey and close costly communication gaps between all stakeholders in the payments ecosystem. These include thousands of the world’s biggest ecommerce brands, the largest banks, service providers and consumers. For the first time, fraud, customer dispute and purchase insights are now available and actionable in real time – delivering significant revenue growth and cost-saving opportunities for all. Ethoca was acquired by Mastercard in April 2019. To learn more, please visit www.ethoca.com 

About Mastercard 

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. To learn more, please visit: www.mastercard.com

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Keywords: ecommerce, chargebacks, first-party misuse, Black Friday, Mastercard
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime