Because I work for an international merchant services provider, I take particular note of the different online checkout processes, and how easy/complicated they are, the friction and the mistakes some merchants make. Recently I went to purchase the soccer jersey of the German club, Borussia Dortmund, for my son for his birthday on a popular soccer gear-specific website.
This site is well-regarded and gave me a frictionless experience…mostly:
- It had guest checkout — no need to create an account (or signup for a newsletter).
- There were a minimum number of steps — three or four, I think.
- The website accepted all the popular payment methods.
It was going so well, until I got to the ‘submit order’ button. A message appeared explaining there was a problem, that I needed to contact my credit card issuer to complete my order.
It was rather late at night, and frankly, the last thing I wanted to do was call MasterCard (nothing personal, MasterCard). I tried one more time to see if the order would process, but received the same message.
The next day, I tried a different soccer gear website, cruised through the checkout, and a few days later my son was wearing the yellow and black of Dortmund.
A few theories I have about my declined order
Of course, I don’t specifically know the reasons why my order was falsely declined by the first website, but I have some educated guesses.
- The soccer gear retailer is based in Europe, and I’m sure cross border transactions are flagged for further review. Understandable.
- Second, the time of day of my purchase — about 10 p.m. in New England, at least 3 a.m. in Europe — attempt may have worked against me. Again, being in the international merchant services provider business and knowing the amount of credit card fraud out there, I get it.
But what about those visitors whose orders are denied, those outside the payments industry perhaps naive to the current climate of e-commerce fraud? Such an experience leaves an awful (sometimes permanent) impression.
Some things we might suggest to our soccer gear merchant
There are many reasons consumers abandon online checkout: Too many steps. Retailer doesn’t offer my preferred payment method, unexpected delivery fees, etc…
Again, if I had to guess, I’d say that our soccer gear merchant has some type of machine learning or AI protocol in place which creates fraud alerts on transactions with criteria similar to mine: cross border, irregular hours, first-time customer. It’s also safe to guess that this merchant might need a settings adjustment on his AI scheme, that it is likely generating a significant amount of false positives — legitimate sales flagged and identified as fraudulent.
In the current e-commerce ecosystem, we understand the soccer merchant’s trepidation — cases of friendly fraud are reaching new highs year after year. But there is a happy medium, a sweet spot of sorts, to be reached when using AI and machine learning to gauge fraud threats on transactions. The soccer merchant would do well to realize that, thus reducing the number of needlessly lost sales.
An absolute necessity for international merchants
Firstly, machine learning and AI schemes for mitigating fraudulent transactions are very effective tools. We absolutely recommend them — any international merchant services provider would — but they’re not the silver bullet.
We implore merchants personally examine — to complete manual reviews of, in payments-speak — transactions that generate high fraud scores. We even suggest merchants should take it a step further by initiating contact with the customer — by e-mail or by phone — to go over the details of the transaction.
There is no substitute for human intuition in identifying legitimate from fraudulent transactions.
Partner with an international merchant services provider
Though known as an international merchant services provider, Instabill has partnerships with companies that specialize in chargeback and fraud prevention including schemes that involve AI and machine learning. Speak with us directly about your next international merchant account solution at 1-800-530-2444, and we’ll be happy to match you with our partner to protect your business.