Frictionless Payments and Transaction Disputes

As the holiday shopping season approaches, one thing is clear – e-commerce is thriving. An eMarketer Report forecasts 2018 US holiday e-commerce sales to grow 16.2% to $123.39 billion. Looking back to 2017, mobile sales accounted for 34.5% of all e-commerce sales.  By 2021, mobile sales are forecasted to account for 54% of total e-commerce sales. These numbers should excite any merchant with omnichannel capabilities, but they come with a warning: Nothing can derail outstanding holiday sales like transaction disputes, friendly fraud, and merchant errors.
Data Is Key in a World of Frictionless Payments
Busy holiday shoppers depend on frictionless purchases and fraudsters bank on it. E-commerce customers want their experience to be smooth, efficient, and fairly anonymous, which is what attracts them to omnichannel merchants. If the purchasing and shipping process is hassle-free, the merchant has cleared one hurdle.
But this race for profits is not over until January when merchants must deal with consumer billing confusion and consumer fraud. Having purchase data to confirm a transaction, stop fraud, or prevent a chargeback is only valuable to the merchant if the consumer contacts them first with a dispute. This is problematic, considering that consumers bypassed merchants and went directly to their issuer in up to 76% of dispute cases. Compounding the situation, issuers typically do not have sufficient transaction data to resolve the issue, resulting in a provisional refund and possibly a costly chargeback. In the case of fraudsters, this marks an easy path to “free” merchandise and unwarranted refunds. However, when shared with the right partners, transaction data is an invaluable tool to resolve transaction disputes and prevent chargebacks.
Data-Sharing is a Two-Edged Sword
Consumers trust merchants to protect their data, and in turn merchants must do everything in their power to ensure that safety. A data breach broadcast in mainstream news and circulated via social media platforms can be devastating to a merchant. Complacency in the card-not-present (CNP) economy is the greatest threat to detecting, deterring, and preventing fraud in digital and mobile channels. Fraudsters cleverly look to exploit gaps in a merchant’s security policies and procedures. They understand that merchants struggle to keep up with evolving payments innovations, and make their living pouncing when merchants are most vulnerable, such as during the ultra-busy holiday shopping season.
Protecting Consumer Data
Protecting merchant data is a multi-step process:

  • Conduct a data privacy audit: Identify what data your business needs and the actual data you are collecting.
  • Only keep necessary transaction data: This includes key transaction details, such as product purchased, merchant name and contact information, type of device used for the purchase and customer name, user name, IP address, location, phone number, and email address. To help identify true fraud, retain customer information including their transaction history, previous transaction disputes, and refunds issued.
  • Protect all data you collect: Ensure your network, databases, and website are secure from hackers with regularly scheduled reviews and testing.
  • Secure customer data: Ensure the customer service team is up-to-date with best practices and current technology. Train your customer data team never to give out credit card information, addresses, phone numbers, or passwords unless they can verify the consumer’s identity with security questions before proceeding with discussing their account.
  • Clearly communicate your privacy policy: In addition to posting a clear privacy policy on your website, make sure you keep your customers current on any changes to your policy.

Ensure a Profitable Holiday Season
Both merchants and issuers have a vested interest in preventing fraud and chargebacks. In addition to profit loss, they can suffer brand damage that will impact them well into 2019 and beyond. By capturing, securing, and sharing transaction data with issuers, merchants can leverage their most valuable tool to maximize profits following the holiday shopping season.
Contact us to learn how Verifi’s collaboration solutions can facilitate data-sharing and protect your profits this holiday season and beyond.