The webinar ‘Unlocking growth in digital commerce: Turning declines into approvals’, moderated by The Paypers, provided valuable insights into optimising customer conversions, enhancing approval rates, as well as fostering secure, frictionless online commerce. The session offers practical guidance to help businesses unlock new growth and is suitable for everyone in the fintech, payments, or ecommerce space.
Among the key topics tackled in this webinar, participants can expand their knowledge on:
The true comprehensive cost of false declines;
How to adapt checkout processes to route orders based on their risk level;
How payment agility delivers more payment success.
In today’s economy, digital businesses are under high pressure to grow but proves difficult when legitimate orders are blocked at checkout. False declines and friction can cost companies not only serious revenue loss but also customer trust.
False declines occur when legitimate transactions are mistakenly flagged as fraud, leading to revenue loss and a damaged customer relationship and even driving away customers for good. In fact, one in three customers will likely not shop with a merchant after experiencing a false decline.
For merchants, this means missed opportunities to convert potential sales and foster brand loyalty. According to a report by PYMENTS and Nuvei, USD 308 billion was lost due to false declines in global revenue, in 2023. Moreover, according to Aite Group, merchants could lose up to 75 times more revenue to false declines than actual fraud, which highlights the importance of checkout optimisation to reduce false declines.
Stringent fraud-blocking processes often lead to rejecting borderline legitimate purchases unnecessarily. Moreover, too many false declines negatively impact authorisation rates, which could further hinder the business. Generally, false declines are seen like a black box, as few retailers have the necessary tech tools to identify the problem.
Payment orchestration represents one of the hottest topics in the fintech world in the past few years, as many companies either developed this solution in-house or chose a third party to optimise payment routes, increase sales, and reduce false declines.
The technology consolidates and optimises payment methods, reducing the likelihood of issues linked to false declines. It uses intelligent (smart) routing to find the best paths for transaction approvals, increasing authorisation rates. For instance, transactions that meet a downed or unresponsive gateway can be instantly re-routed to a second provider. At the same time, soft declines can be re-routed to a new gateway or with a different token format.
Checkout options are tailored to the geography and profile of the transactions. Merchants can then customise options, based on their requirements, for instance, for BNPL offers higher than USD 200, or to auto-reject gift cards for recurring payments.
When it comes to payment agility, merchants must consider balancing security and data protection with delivering a smooth and seamless payment experience across different platforms.
The experts agreed that working with a strong payment orchestrator is paramount for this, as payment orchestration is, at its core, a connectivity/abstraction layer for businesses to build a best-of-breed payments stack. Maintaining a high responsiveness rate is also important, as teams are often up against bright fraudsters who bring ingenuity in their scamming methods. Thus, the payments infrastructure must adapt quickly.
Merchants should also consider building for visibility. Payments, like risk assessment, depend on the number and quality of the signals they can provide. Pre- and post-authorisation behaviour and transaction data represent the brick and mortar when building an optimised payment experience for businesses and customers.
Every order is unique. Real-time data helps the merchant understand the nuance and the shopper’s identity (based on various key points, including differences between the shipping and billing addresses, on page shopping habits, etc.), which then provides a granular risk analysis of every order and the reasons behind the approved or declined order. Thus, merchants need to understand where selective, additional verification can help convert good orders.
At the same time, behaviour-based data can identify anomalies, empowering systems to decline fraudulent activities while approving valid transactions.
Together, insights from customer behaviour allowed for tailored payment experiences, increasing ease for shoppers and boosting approval rates.
Trust grows when customers experience seamless purchasing, knowing their transactions are secure, their approvals are reliable, and the rare request for more information is backed by a process that makes sense to the customer.
Payment orchestration ensures secure transactions without adding friction, reinforcing trust throughout the payment process.
At the same time, transparency, advanced fraud detection, and smoother use experiences collectively build strong long-term customer loyalty, which boost revenues for merchants. Solutions like broad payment-method support and payment-method also reduce risk assessment coverage.
At the end of the webinar, experts from IXOPAY and Riskified shared some practical advice for merchants who wanted to optimise their payment systems to convert more legitimate orders, without risking compromising security and efficiency.
Merchants should start by auditing existing payment and fraud systems to identify inefficiencies and gaps and continue with leveraging tools such as payment orchestration to streamline processes and reduce unnecessary declines, while maintaining systems agile.
Continuously monitoring transaction data and adjusting strategies to maintain a balance of high conversion rates and strong security also represents an important step for merchants looking to scale their business in a highly competitive market. Finally, merchants should also be ready to comply with the latest regulations in the field, including VAMP, and adding new tools into their fraud prevention strategies to maximise approval rates and avoid reaching the threshold.
Irina is a Senior Editor at The Paypers, specialising in fraud and online payments. Leveraging her Ph. D. in Economics and a strong economic academic background, she constantly observes new developments in tech, innovation, and regulation, educating the audience about trends in fraud prevention, chargebacks, scams, social engineering, digital identity, GenAI, and ecommerce. You can reach out to her via LinkedIn or email at irina@thepaypers.com.
Riskified (NYSE:RSKD) empowers businesses to unleash ecommerce growth by outsmarting risk. Many of the world’s biggest brands and publicly traded companies selling online rely on Riskified for guaranteed protection against chargebacks, to fight fraud and policy abuse at scale, and to improve customer retention. Developed and managed by the largest team of ecommerce risk analysts, data scientists and researchers, Riskified’s AI-powered fraud and risk intelligence platform analyses the individual behind each interaction to provide real-time decisions and robust identity-based insights. Learn more at riskified.com.
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