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Online fraud has increased as online sales soar.
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As online sales continue to soar, so has online fraud. But a new solution by Forter and e-commerce platform FreedomPay can mitigate the risk with a “fraud-proof” checkout.
In most e-commerce interactions, the transaction often involves multiple players. There’s the online merchant, and the credit card issuer and the bank. All of these companies are all likely to deploy separate fraud tools, which can result in an increased chance of rejection for the customer.
But if this is done incorrectly, this poor experience can risk turning away a shopper from that brand or business permanently, which can erode long-term sales and weaken lifetime customer value.
This year, that risk has increased as more consumers have turned to online shopping, which has placed greater strain on the networks that may opt for excess caution and greater rejection rates.
“Currently, transaction volumes for new online customers are two times greater than pre-COVID-19 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 five to seven times more likely to get falsely declined.”
New visitors to an e-commerce web site 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 more than 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,” Smith said. “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.
