The world of e-commerce has experienced exponential growth in recent years, which has increased the risk of fraud. This not only means a loss of sales for companies, but also an increase in purchasing friction. To help e-commerce websites overcome this challenge, Worldpay and Signifyd have developed a solution that aims to eliminate the risk of fraud while increasing the number of transactions and improving the customer experience.
Let’s take a closer look at the main elements of the solution. “Guaranteed Payments” from Worldpay and Signifyd.
Machine learning for safer purchases
The use of machine learning capabilities enables the Analyzing a large amount of data to understand who is behind each transaction, and what is your intention. It’s information that all businesses need to not only prevent fraud but also maximize revenue.
Often, the fear of fraud has worse consequences than the fraud itself. Due to the perception of fraud, banks and payment processing networks reduce purchase acceptance by an average of 4%, while merchants reduce purchase acceptance by almost 10%. For companies, this means loss of sales.
That’s why companies need access to data and prevention tools more than ever to address this situation.
With a solution like Guaranteed Payments, we see an average increase in sales of 5-7%.
Fraud and E-Commerce: How We Evaluate Transactions
Using a stolen payment method in eCommerce is easier than it seems. A consumer who notices funds disappearing from their account can request a refund. Companies, in turn, also fall victim to fraud, as they are responsible for the transactions they authorize. Therefore, they must refund the amount to the bank or payment service provider, which in turn pays the consumer without receiving the item back.
To prevent these scams from harming those who have an eCommerce website, Worldpay, with a global transaction volume of more than 40 billion per year, has partnered with Signifyd, a pioneer in fraud protection, has developed the Guaranteed Payments solution. This tool is responsible, among other things, for checking:
- The prospect’s identity is determined through various signals, including: Verifying that the email address used for sign-up and the billing address typically used for shipping match other account information.
- Spending patterns: Evaluate behaviors to understand if the purchase is legitimate. For example, if a user buys a smartphone every two years, the decision to buy three at once arouses suspicion.
- Device Used: A user connecting to a tablet, lingering on some pages and less on others, is exhibiting natural behavior. On the contrary: a bot is likely to find the most expensive product and buy it immediately.
The data can be used to understand who is behind the transactions and to block suspicious purchases.
“With Guranteed Payments solution, online merchants forget about paying chargebacks. Worldpay secures transactions. Additionally, we are seeing a 5-7% increase in approval rates for purchases that were previously halted due to fears of fraud. Finally, we reduce false positives that impact the customer’s shopping experience“, explained Rodrigo Vilariño, Country Manager Spain and Portugal at Worldpay.
Strong customer authentication (SCA) does not necessarily have to impact the customer’s shopping experience
To avoid potential fraud, European Economic Area regulations require e-commerce companies to use strong customer authentication. It asks consumers to verify their identity using a few options: including passwords, device IDs and biometric recognition. This allows merchants to shift responsibility for fraud to those who manage the payments, thereby avoiding problems for retailers. The disadvantage of this protection is that an increase in friction leads to a decrease in sales. And this can have a greater economic impact on billing than fraud.
For this reason, eCommerce businesses can request exceptions for eligible transactions through the Guaranteed Payments tool. If the request is approved, the SCA is bypassed and Worldpay and Signfifyd assume responsibility for the legitimacy of the order on behalf of the merchant.
“By implementing Worldpay and Signifyd’s solution, merchants can maximize the use of exemptions for low-risk transactions and ensure that only high-risk and non-exempt transactions are subject to Strong Customer Authentication (SCA). This approach minimizes the likelihood of order rejections and simplifies the secure transaction process for customers. In cases where a chargeback occurs on tax-exempt transactions, guaranteed payments provide merchants with liability shifting and protect them by refunding the full amount. Both the retailer and their customers benefit from this.” Davide Antonelli, Enterprise Account Executive at Signified
Protecting e-commerce from fraud with data: the solution from Worldpay and Signifyd
The protections enjoyed by buyers in Europe make online purchases safe for those who buy, but create problems for those who sell. Now merchants can leverage guaranteed payments to reduce friction without compromising security.