Genuine sales loss – the downside of fraud prevention

According to data from ThreatMetrix, online retailers risk abandoned purchases due to the extra verification processes needed. Although, the cost of online orders lost to fraud reaches almost GBP 3 billion in the UK, businesses register higher costs when it comes to sales, as fraud prevention processes can sometimes make customers feel frustrated and abandon the process. Furthermore, research mentions that loyal shoppers are being turned away because web fraud systems often lack the ability to identify them as genuine shoppers.

Tony Larks, Director, Communications, EMEA, at ThreatMetrix, states that even if a shopper is accepted, many ecommerce regulars are turned off by burdensome second level authentication such as 3DSecure, and abandon their basket. Compounding the problem is that many shoppers now log on from multiple devices and may not be recognized if they log in from a mobile device.

The report entitled Are You Treating Your Customers Like Criminals? also points out that a new approach is needed to create a frictionless online customer experience. Instead of adding budget into manual checks to stop legitimate customers falling into fraud filters, retailers need to adopt a single platform that provides comprehensive context-based authentication and personal recognition.