Fraud Prevention: Delivering Trust-Based Customer Experience

The reality is that new users are far more likely to be declined at the point of transaction leading to the immediate loss of this revenue, and in many cases these customers never return meaning longer term loss of lifetime value.

- Monica Acree, Vice President, Asia Pacific, Forter

As India continues to battle the pandemic, e-commerce platform, online retailers have become the key elements in making retail sector functional for the essential needs. The second wave of pandemic and lockdown, has spurred a change in consumer behaviour, with almost every individual turning to online sites to buy goods and services they need. However, as the number of new online buyers surge, a new challenge emerges for the consumer and the retailers, which is an increase in the likelihood of online fraud.

Retailers are already caught in a balancing act of ensuring that they are accurately assessing the legitimacy of these new users, while ensuring that customer experience is not compromised. However, the reality is that new users are far more likely to be declined at the point of transaction leading to the immediate loss of this revenue, and in many cases these customers never return meaning longer-term loss of lifetime value.

We call this phenomenon the New User Missed Opportunity (NUMO), and it is costing retailers a fortune. The longer-term loss of revenue could easily be more than the cost of the occasional fraud loss that an e-commerce business’s existing fraud prevention solution is preventing. So how can retailers ensure that they are on the right track when it comes to fraud prevention and avoiding getting caught up in the NUMO cycle?

Minimise Lost Revenue as Much as Possible

NUMO can result in a large amount of lost revenue. According to Forter studies, retailers stand to lose up to 75 times more revenue to false declines than they can lose to fraud.