Conversion Rate Efficacy and Fraud Reduction Part 3

September 17, 2021

In part 3, we look at the role customer profiling and tailored checkout processes have on conversion rates and fraud reduction.

Customer Profiling

For a balance between fraud prevention and high conversion rates, a useful fraud filter must encompass more than fraud identification—it must equally focus on the positive identification of good customers. This is the only way for merchants to ensure their fraud management system helps drive genuine customers to checkout, by improving user experience and boosting loyalty.

Countless fraud management tools and processes build upon data to profile fraudsters, but the right transition of focus enables profile generation of genuine customers, as well.

For instance, most merchants have blacklists used to automate fraud decisioning processes. Information normally includes account details, email address, payment method or other predetermined categories. The same idea can be used to configure a whitelist for the recognition of genuine customers to be treated accordingly.

 An advantage of these separate lists is that they enable flexibility. For example, common practice is to add suspected fraudulent activity to a temporary blacklist (usually 24 hours), giving merchants immediate protection while also allowing shoppers to try again if fraud is not confirmed.

Analytics and behavioral profiling can also be used effectively to identify true customers and deepen understanding of buying trends and preferences. Sophisticated monitoring and reporting tools cultivate fraud and customer patterns, enabling quick recognition of any impacts fraud management strategies may be having on them (whether good or bad). Equipped with the right information, merchants can address fraud rules with ease, protecting against additional fraud loss and maintaining fair conversion rates.

Analytics further benefits support of conversion rates when automation fails—such in the case of high-risk transactions. Though high-risk transactions are frequently declined, advanced analytics allows merchants to accept these transactions while monitoring the shopper’s subsequent activity and retroactively blocking those later identified as fraud.

Catering to Customer Needs

Accumulating data, analyzing it and developing useful tools from its interpretation create a viable and effective fraud management system. However, extra value can be taken from going a step further—using intelligence gained from adequately profiling offers a range of choice for genuine customers (thereby supporting higher conversion rate and increasing customer loyalty).

 Merchants have the capability of offering flexibility and choice to known genuine customers. This takes many forms, including offering “different, high-risk fulfillment options, such as next-day or same-day delivery.”

Other popular options implement ‘active payment method selection,’ a merchant tool that tailors payment methods according to customer risk profiles. Safe shoppers are given the full host of options while

Accumulating data, analyzing it and developing useful tools from its interpretation create a viable and effective fraud management system. However, extra value can be taken from going a step further—using intelligence gained from adequately profiling offers a range of choice for genuine customers (thereby supporting higher conversion rate and increasing customer loyalty).

Merchants can offer flexibility and choice to known genuine customers. This takes many forms, including offering “different, high-risk fulfillment options, such as next-day or same-day delivery.”

 

Other popular options implement ‘active payment method selection,’ a merchant tool that tailors payment methods according to customer risk profiles. Safe shoppers are given the full host of options while riskier clients are only offered payment methods that include additional risk checks.

To boost client loyalty, it has now become common practice to tailor authentication processes for genuine customers. Many large merchants, for instance, enable valuable transactions to circumvent 3D-Secure, reducing an additional step and fast-tracking conversions.

How has your business catered to the needs of user experiences in the checkout process? Share your thoughts in the comments section below! And check out ACI Worlwide for more information on payment processing.

Remember, AltoShield serves as a great tool in fraud reduction and we’re always happy to start a business relationship with you. Reach out today!

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