eCommerce Fraud Report launched by CyberSource
Best-in-class retailers should focus on optimising order acceptance in 2013 according to the ninth annual UK eCommerce Fraud Management Report from CyberSource, a Visa company (NYSE: V).
The survey of 200 UK merchants revealed clear opportunities for businesses to identify and convert valid orders faster, whilst further streamlining their manual review processes. According to the report, retailers reject a significant proportion of eCommerce orders, some of which may be valid. Furthermore, merchants reported that, on average, they manually review a quarter of eCommerce orders; however they ultimately accept over two thirds of these transactions.
“In 2013, businesses should take an holistic view of fraud management and focus on acceptance; identifying good customers sooner and then optimising their entire payment experience, irrespective of the device or channel used,” said Simon Stokes, Managing Director EMEA at CyberSource.
The eCommerce opportunity
The UK eCommerce industry is a world leader in terms of its maturity and scale; worth £78bn in 2012 according to the IMRG. The report found that the US, Germany, France and Ireland generate the most cross-border eCommerce revenue for UK merchants. Italy, Spain and China are the top countries planned for market entry in 2013. New territories and digital channels bring significant opportunity to merchants, as well as potential complexity.
“As businesses look to reach more customers and source new revenue opportunities, it’s important to find the right balance when defining risk strategies,” said the report’s co-author Dr Akif Khan, Director, Strategic Initiatives, CyberSource. “Optimising profits means focusing on the end-to-end eCommerce journey, and doing so efficiently. By automating acceptance and minimising the need for manual review, fraud managers can positively impact conversion rates, profit margins and the overall customer experience.”
CyberSource’s Managed Risk Services team has introduced a five point plan to help businesses streamline order acceptance. Much more detailed insight is offered in the full report, accessed here: http://www.cybersource.com/ukfraudreport
-Assess the Opportunity: Compare your key fraud management metrics to those in the report, including the order reject rate, and consider where there is room for improvement.
-Examine Review Outcomes: Look at the proportion of manually reviewed orders that you ultimately accept. If this is too high, the criteria used to sort orders into a review queue may need tightening; automate as much as you can upfront to increase valid order acceptance.
-Optimise Rules: Constantly analyse reviewed orders, and create new rules to improve the customer journey. Ensure rules are refined to reflect each market and payment method, as well as seasonal, or even daily, buying behaviours.
-Consolidate Channels: Using one platform helps you take a single view of the customer across web, mobile and call centre channels, as well as markets. Track transactions from multiple sources using cross-channel velocity checks.
-Keep Testing: Constantly test and tune new rules to understand how changes could improve your performance and conversion rates. Find the right balance: profit is the objective, not necessarily the lowest chargeback rate.