Many eCommerce merchants fail to connect the dots between fraud detection and failed payments. In fact, just one-third of merchants employ mechanisms that detect potential fraud as the cause of failed payments. This heightens the risk of lost sales and signifies a missed opportunity for improving payment success rates.
Securely processing transactions is growing increasingly complex, and few firms can adequately address security concerns independently. In fact, we see a substantial gap in the adoption of screening tools based on merchant size. Collaboration between eCommerce merchants and payment service providers (PSPs) is crucial in deploying effective fraud prevention strategies and providing smooth customer experiences.
These are just some of the insights detailed in “The Role of Fraud Screening in Minimizing Failed Payments,” a PYMNTS Intelligence and Nuvei collaboration. This report examines the efficacy of the fraud screening mechanisms eCommerce merchants use. It draws on insights from a survey of 300 heads of payments or fraud departments from international eCommerce companies conducted from Aug. 10, 2023, to Aug. 31, 2023.
Other key findings from the report include:
Forty-one percent of merchants collaborating extensively with PSPs have implemented screening mechanisms to detect potential fraud as a cause of failed payments. In contrast, 37% of those with no PSP collaboration and just 22% of those that minimally collaborate have done so.
Adopting the right screening strategy helps minimize friction and maximize recovered transactions. Eighty-five percent of merchants with deep levels of collaboration with PSPs encourage customers to retry purchases initially flagged as potential fraud, while just 70% of those with minimal or no PSP collaboration do so.
More than two-thirds of merchants are interested in innovative solutions to combat friendly and chargeback fraud. Notably, those with minimal or no PSP collaboration show markedly higher rates, at 74% and 78%, respectively. This suggests that eCommerce merchants extensively collaborating with PSPs already have comprehensive fraud management tools that make these forms of fraud less of an issue.
Collaboration can significantly improve a merchant’s ability to manage online payment security, prevent fraud and minimize lost sales, ultimately benefiting their bottom line. Download the report to learn how eCommerce merchants can work with PSPs to implement the right fraud prevention strategies.