E-commerce merchants have to balance growth and risk. To maximize growth, it’s very important to streamline your checkout process and eliminate as much friction as possible. Yet, frictionless checkout that is implemented carelessly will make your site an easy target for fraud. Lost merchandise and chargeback fees will quickly erode the sales benefit of frictionless checkout. Conversely, fraud detection tools help minimize chargebacks, but they can also reduce your conversion rates. Merchants should look for fraud detection tools that are as frictionless as their checkout flow. Here are three attributes that make for a frictionless fraud solution:
Fraud detection platforms should be fast. It should take well under one second to determine if the order is fraudulent. Remember, customers expect to see a confirmation page immediately after they click submit. The longer they have to wait while you assess the likelihood of fraud, the more likely they are to click submit a second time, refresh the page, click the back button, or close the browser – all of which could prevent a transaction from being processed.
When your goal is to minimize fraud, it’s easy to slip into mindset where everything looks suspicious. In reality, most orders are legitimate though. And you’re not going to hit all of your growth milestones by turning away your largest orders. Fraud rules should be continually reviewed to assess their impact and accuracy. Strive for a false positive rate under 5%, but don’t stop there. Start by eliminating the rules that don’t trigger often and have a high false positive rate. Then, review the ones that remain to look for ways to reduce the false positives without letting more fraud through.
There are a lot fraud detection tools out there. When choosing which ones to implement, it’s important to consider a tool’s effectiveness as well as its shopper impact. Shopper verification tools that redirect the shopper’s browser or require a new password often increase shopper abandonment, which detracts from their usefulness. The best fraud tools have no shopper impact. They gather all the relevant information as a shopper browses your website or completes the checkout form, and analyzes it without the shopper even knowing it. The analysis is both unobtrusive for legitimate customers and concealed to fraudsters.
It’s possible to have frictionless checkout and powerful fraud detection. And when the two are combined the results can be amazing. Frictionless checkout means higher conversion rates, more customers, higher order velocity, and increased sales. While a frictionless fraud detection platform will decrease chargebacks, minimize lost merchandise, and also increase sales by lowering false positives.
If you want to make your checkout frictionless, we’ve got the solution for you. Take our Checkout Conversion Calculator to identify points of friction in your checkout and increase sales by up to 40%: