Fight Fraud While Providing a Great Customer Experience
Everyone has had one experience or another with servers. Either they’ve been one, or they’ve eaten at a restaurant where they’ve been served by one. So, it’s easy to picture them walking to your table, balancing large trays loaded with plates and glasses. It may look precarious, but they’ve figured out how to perfectly balance the contents, so they won’t spill.
If even one item were to be removed or moved, it could send the whole thing toppling over, leaving the customer angry or frustrated and the restaurant with a huge clean up ahead of them.
Just as a server has to strike the perfect balance when delivering food, businesses must find the best way to balance convenience with security.
Not doing so and prioritizing one over the other could be detrimental. A business that has great security such as requiring passwords and PINS to checkout may deter customers who see it as too much of a hassle. But a company that has a quick and easy checkout experience may wind up putting their customers’ personal information and their own bottom line at risk.
Like many of life’s balancing acts, this can be a delicate situation.
According to the 2019 American Express Digital Payments Survey, 27% of online sales end in fraudulent transactions. Additionally, 69% of merchants said that they’ve allocated significant time and money to dealing with payment fraud over the years.
Hearing this, it seems like the easy thing to do would be to beef up security by adding extra layers of protection. However, merchants can’t simply throw convenience out the window. It’s still an extremely important part of the online shopping experience.
Rather, businesses must improve the online experience with payment innovation and fraud detection technology.
Check out our video below and keep reading for a glimpse into our guide Understanding Payment Fraud and How You Can Mitigate Your Risk.
Where Do Merchants Feel Vulnerable?
- 82% of merchants feel vulnerable to payment fraud through mobile transactions.
- 79% feel vulnerable when it comes to payments made through a website.
- 66% believe point-of-sale payments are also at risk from fraud attacks.
- Overall, the merchants surveyed said 27% of their annual online sales were fraudulent.
To make things even more complicated, many customers, despite wishing to maintain the privacy of their personal information, aren’t willing to sacrifice a quick and convenient checkout experience. About 32% say that features used to enhance security at checkout such as passwords and PINs are cumbersome and complicated.
This puts more pressure on merchants to find solutions that help both the consumer and the businesses.
The use of fraud technology can help to reduce fraud significantly. Having requirements to complete transactions such as IP filtering, 3D Secure, and tokenization are all useful tools. And if you find that your customers are reluctant to enter a PIN or password, try using mobile device fingerprinting instead as this requires little to no effort on their part.
Here are some interesting stats on what merchants think of fraud security:
- 77% think that requiring a one-time password to complete a transaction is effective in preventing fraud, yet only 33% do so.
- 75% of merchants believe mobile device fingerprinting helps reduce fraud, yet only 31% have implemented it.
- 70% believe tokenization is effective, yet only 19% utilize it.
A good solution for many businesses is contactless payments. Not only do they reduce friction in transactions, they provide a smoother experience while also improving security for personal data. And they’re fairly simple for merchants to implement.
Every company is different and it’s important to find the solution that will work best for you and your company. It’s always good to do your own research and compare solutions and technologies to find what’s right for you. Remember, there is no sure-fire way to prevent fraud. Take the time to build out a personalized plan for your business, and make sure your approach is multi-layered.
To find more information on fraud and how you can prevent it at your company, read our full guide, Understanding Payment Fraud and How You Can Mitigate Your Risk, here.
About the Author
As the Content Strategist at Sertifi, Kelli loves writing and the power of words to tell stories. She assists the team with content creation and occasionally dabbles in design. Outside the office, you can find her reading, traveling (mostly to Michigan), and buying too much stuff on Amazon.