In order to turn guest customers into returning, loyal clients, the payment – the “holy grail” of the ecommerce journey – should be secure, simple, and seamless.
Developing a secure and intuitive ecommerce process that protects the transaction and adjusts to the consumer’s preferences will ultimately translate into more payments and more revenue for merchants.
In this blog, we’ll look at how merchants can use global intelligence of consumer’s digital identities and their attributes (devices, emails, purchase behavior, location, etc.) to be able to authenticate consumers throughout their digital journeys, without adding unnecessary friction.
There are two main factors/processes that can impact (both positively and negatively) conversion rates within an eCommerce channel. These are a) the end-customer-driven element, where the ecommerce retailer is responsible, and b) the actual payment process stage, which is managed by the acquirer/issuer bank.
A standard digital user journey has a specific flow: registration, product selection, delivery/collection details, payment and final confirmation. If a merchant adds friction at any of these stages (especially friction deemed not relevant by the user) this can impact conversion. Therefore if a merchant can ensure this journey is not cumbersome, has minimal friction and is seamless, the higher the probability the consumer will not leave or interrupt the journey resulting in greater conversion rates for merchants as well as repeat business.
A secured and a seamless multichannel UX
Enabling a seamless UX across the entire customer journey is challenging for merchants, especially when this seamless capability is required across all channels: mobile sites, native apps and even at POS. The more integrated and consistent the process across all channels, the greater the conversion and loyalty that merchants will benefit from.
Implementing a global multichannel solution which can monitor consumer’s digital identities and their different online activities (new registrations, logins, payments, shipping, change, chargebacks) will help merchants to achieve a consistent seamless UX and grow their businesses while managing the new risks, as such a solution would require less friction throughout the process.
Consumer’s Authentication and Payment
With the introduction of PSD2, the secured authentication of a payment within the EEA including Strong Customer Authentication will become the norm. This should bring with it less fraud and less risk for merchants. However, depending on how merchants implement it, it could add friction to the checkout process, and impact on conversion.
However, Merchants can leverage the intelligence they have identified from within the consumers’ digital journeys (including attributes such as devices, email address, names, and behavior patterns) to authenticate them. By utilizing this data and coupling it with a global multichannel identity and fraud intelligence solution, merchants could be risk-assessing and authenticating in an invisible way, even before a payment is initiated.
Optimized Payment Processing
Intelligent acquiring routing (local versus global acquirers)
In order to simplify the complexity of ecommerce and global payments, PSPs can offer optimal routing of a payment to the most appropriate and relevant acquiring channel. Usually relevant payment methods and payment products will be implemented depending on the industry, risk appetite and the geographies/ demographics merchants are targeting. In attempting to manage the risk of fraud of all these transactions, PSPs or acquirers will have some standardized rules in place which predominantly focus on the information available on the payment checkout such as bin ranges, credit card number, bank account, location of the purchase, type of transactions and amount of the transaction.
Optimization between fraud reduction and revenue
In order to prevent and minimize the risk of fraud while ensuring revenue growth, merchants need to find an optimal point in the ever-changing balance between fraud and their revenues. How many good customers need to be jeopardized or even lost (forever?) to maintain low fraud levels? How can merchants balance their risk appetite versus their task of reducing fraud, whilst increasing revenues with a low number of false positives?
In order to manage the risks, merchants could be proactive and implement a risk assessment of a transaction prior to the payment method’s selection. Based on the shopper risk profile, merchants could decide whether to offer credit cards, or other alternative payment methods with less risk such as nonrefundable payment methods for e.g.: SEPA Direct Debit.
Real time Risk Based Assessment and dynamic threat intelligence
As previously mentioned, merchants could actually integrate their risk and fraud model into the entire customer journey; using digital insight at each step to measure risk and take a decision in a later phase within that journey. The main touchpoints and phases that could be assessed in real time are:
- At the time of consumers’ acquisition merchants can assess in real time an eKYC form.
- Logins can be also monitored and further step ups could be dynamically applied on a risk profile basis.
- Transaction Risk Analysis of payments in order to assess their risks before their authorization could also be implemented.
The Power of Trust gained by real time risk-based assessment of the digital customer journey
Having a real time dynamic and contextual intelligence of end customer during their whole relationship with merchants is one the most important building blocks towards an invisible authentication process and a seamless user experience. New account registrations, logins and payments need to be experienced as a secured and seamless experience for consumers, even if it is the first time they visit that e-Shop.
Collaboration, collaboration, collaboration.
Even if the merchant has not seen the end customer before, collaboration among peers in the same industry via a global and crowdsourced intelligence of digital identity can provide them with an up-to-date risk assessment of the consumer and its digital identity.
Penetrate existing markets & expand to brand new ones
With a 360 degree view of the consumer digital journeys, merchants can effectively manage their fraud, reduce risk and have a proactive real-time risk assessment. They can further develop and penetrate new markets even it means higher risks, as they can utilize the global shared digital identity and fraud intelligence when acquiring new customers in new markets.
Digital identity data (devices, locations, behaviors, preferences) and payment data (acquiring channels, currencies, and authentication) gathered throughout the digital customer journey, shared globally and by industry, can help merchants to optimize their ecommerce conversion in a secure and compliant way. All these data driven insights are a basis for a predictive and intelligent way to increase revenues while reducing fraud and minimizing opportunity cost.