Strong Customer Authentication (SCA) is changing checkout processes, aiming to reduce fraud. However, as SCA becomes common amongst online retailers in the UK and the EU, it is unsurprising to learn that the pressure of fraud will also change. Where SCA payments will be able to tackle some types of fraud, other aspects of abuse will dominate the world of ecommerce. But as you construct an anti-fraud strategy in your business, we should continue to seek out opportunities, even with the SCA PSD2 solutions. By addressing the Payment Services Directive (PSD2 regulation) head-on, we can find opportunities to improve customer and merchant experiences, security, and revenue. Through an intelligent online fraud prevention solutions, you can get an edge on your competition in more ways than one.

SCA: the great market disruptor

Faster checkouts and more secure transactions are just some of the expectations of customers as technology continues to innovate. But this natural flow of innovation and advancement has been disrupted by the introduction of SCA PSD2 solutions. Customers are spending longer at the checkout stage than ever before due to two-factor identification. This is leading to antiquated customer experiences and higher rates of cart abandonment. It’s a big problem; 26 per cent of consumers say that long checkout processes are a reason to abandon their online shopping cart, according to the Baymard Institute.

But where your competitors’ trip on their PSD2 strong customer authentication regulation, you can use this great market disruptor to your advantage. Improving the checkout process can be achieved through your online fraud prevention solutions, enhancing the customer experience, reducing cart abandonment, and maintaining good PSD2 compliance.

Accessibility and choice

By diversifying payment options and accessibility to your online shop, consumers will find it easier to buy from your business. Let’s think about digital wallets on mobile phones. Did you know that 67 per cent of UK shoppers have bought products online in the past 12 months using their mobile phones? This is important when considering payment SCA and two-factor identification, as mobile devices can offer convenience for consumers that desktop computers do not.

SCA payment requires consumers to prove two forms of their identity from something they know, something they own, or something they are. This can be passwords, owning a phone, or biometrics such as fingerprints. By using a mobile phone with a digital wallet, consumers have already proved that they own the phone, and speedy biometric such as facial recognition or fingerprint scanning means that two factors of identification are matched. Ultimately, by offering digital wallets on a mobile version of your website, you’re making it easier for consumers to buy from you and prove that they are not fraudsters.

Assessing low-risk transactions that qualify for SCA payment exemption is another way to optimise the checkout experience. The checkout process is invariably quicker when the need for SCA payment is eliminated. The use of a commerce protection platform, such as Signifyd, means that consumers can be assessed in real time based on their historical record of purchases, returns, and behaviour. It measures the likelihood of fraud and abuse with every transaction. When consumers are deemed to be low risk, the need for SCA is removed, and both the merchant and the consumer is protected. By enabling this level of intelligent protection and ease of use on your ecommerce site, a merchant would be recognised as a leader in the ecommerce market, ensuring that security is at the heart of every purchase.

Easier checkout processes lead to returning customers and a revenue boost, and using payment fraud protection to limit the friction of SCA is vital.

Minimising Disruption: A Merchants Guide to simplifying SCA

What’s the future of SCA?

The effect of SCA compliance and PSD2 is clear, disrupting the business and revenue of ill-prepared merchants. But compliance with this regulation alone will not protect a business from further innovation and regulation. Preparing for the future is as important as addressing risks to your business today, and that includes understanding the way that fraud and abuse will happen in the future and how they could be eliminated.

Innovations such as artificial intelligence (AI) will play a large role in the future. But as machine learning and artificial intelligence become tools of business to avoid fraud, they too could become the weapons of choice for fraudsters. Biometric identification is an impressive way to secure your checkout, qualifying as one of the three types of authentication in a two-factor identification. But could synthetic ID fraud also be used to create fake profiles that trick even SCA? Can a computer fake a face or fingerprint?

But while AI’s innovation creates opportunities for fraudsters, it also creates opportunities for merchants to protect their business. The number of consumers shopping online continues to grow, and machine learning can help to profile the activities of shoppers, understanding their buying behaviour. Using AI, a customer’s identity can be verified by observing buying and checkout behaviour. Recognising if they are likely to attempt fraud or abuse or if their identity has been hijacked by fraudsters. With Signifyd, 98 per cent of online purchases today have been made by consumers that the back-end monitors have seen before. This means it can flag those who are looking to abuse the system and block them from buying. Fake profiles can also be flagged as a risk.

Proactive measures that tackle abuse from every angle are essential in preparing for fraud and abuse in the future. Compliance with SCA payment alone will not be enough. Only then can you use SCA compliance as an opportunity for your business.

The post SCA Compliance: The Opportunities of SCA for Merchants appeared first on Signifyd.

What does SCA mean?

Strong Customer Authentication will apply to customer initiated online payments, the regulation has been implemented across Europe from the 1st January 2021 and will be enforced in the UK from the 14th March 2022.

In simple terms, Strong Customer Authentication is a process that authenticates the identity of customers, allowing them to complete online payments.

But how does payment SCA confirm your identity? Well, Strong Customer Authentication will look at three factors to determine a customer’s identity. These factors are known as knowledge, possession, and inherence. This means SCA will seek to identify something you know, like a PIN or password; something you own; such as a mobile phone or tablet; or something you are; scanning fingerprints or using facial recognition.

Together, these factors come together to verify your identity, and customers in the UK and EU must prove at least two before completing their online purchases.

What are the exemptions to SCA?

PSD2 has changed the way that payments are secured. Before the regulation was introduced, SCA was only needed if a consumer was at a high risk of fraud. But now, all transactions are considered a risk. Only payments that meet certain criteria are exempt from requiring Strong Customer Authentication.

SCA exemptions are granted where transactions are considered to be low risk. These include:

Card transactions under €50

These are low-value transactions, and as such, they qualify for a low-value exemption. However, SCA can be triggered if five consecutive low-value purchases are made, or if the total value of low purchases exceeds €100.
TRA or low-risk exemption
TRA stands for transaction risk analysis. Under TRA, a transaction undergoes a real-time risk assessment. If it is deemed to be a low-risk transaction, it will be exempt from SCA. To take full advantage of the low-risk transaction exemption, a merchant needs to keep its fraud rate below specific fraud rates.

Recurring payments

SCA is not required on subscription services. While an initial SCA may be needed to verify your identity, subsequent charges do not need your verification.

Trusted merchants

If a customer trusts a merchant, customers can ask their bank to whitelist their purchases. This means that SCA will not be required when buying through them. This may be used for repeat transactions. This does not prevent SCA altogether, as if there is a risk of fraud, it may still be required.

Business-to-business

If payments are processed through a secured, dedicated payment protocol, business-to-business payments may also be exempt from SCA.

Transactions that are out of scope

Certain payments can be excluded from SCA regulation. These transactions are considered ‘out of scope’, meaning that SCA rules will not apply, and exemption is not necessary. Transactions that are out of scope of SCA include:

Phone or email orders

A merchant can accept payments through mail order or telephone order. These transactions are normally encrypted using methods similar to those paying online. While these payments are out of scope of SCA, they may require more action from the customer.

Prepaid card transactions

Prepaid cards are a little different to normal debit cards. They must be preloaded with cash before their use, and you can only use the balance on the card. One benefit of prepaid cards is that they are out of scope of SCA and can be easily acquired by those with a low credit score, meaning more customers have access to ecommerce stores. Prepaid cards also include gift cards that attribute credit to customers for use at a specific retailer.

One Leg Out transactions (OLO)

Transactions where the acquiring bank or the issuing bank is outside the UK and the European Economic Area are out of scope of SCA. This means that if one of the PSPs (either the payer or the payee) are outside of the UK or EU, then SCA will not be required.

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Overall, the global outlook is promising. According to a 2018 briefing by the United Nations, the global economy is finally growing again after a sustained stagnant period. Regardless of doubts incurred by some political instability — notably Brexit and trade wars dominated by the United States and China — the worldwide economy is experiencing increased investment and trade, improved spending attitudes by both businesses and consumers and better labour market conditions. Moreover, cross-border ecommerce is increasing, as consumers look beyond their country’s boundaries to get the goods they want.

Even though international ecommerce expansion is a key growth opportunity for retailers based in the United States and Europe, it can be a daunting enterprise to embark upon. Here, we explore what to consider and your international retail opportunities to take advantage of.

Things to ponder when going international

The world is a diverse place, with international consumers all bringing their different expectations to the table. If your business is expanding beyond borders, there are a few things that you may want to consider:

Payment methods

Customers in different countries prefer paying in different ways. Whereas United States buyers prefer credit, debit, PayPal, PayPal Credit and Google Checkout, debit is a popular payment form in the United Kingdom. In Russia, cash is still king. You need to set up a payment infrastructure that best meets local preferences.

Product and content localisation

You have to customize your product and content for each market. That means you have to understand local product preferences, descriptions, images and safety regulations.

Language

Although English is widely spoken in other markets, retailers need to evaluate whether to translate the content on their websites. Some retailers elect to translate only portions of their website, whereas others translate entire sites. Wherever content is translated, it needs to be localised and then tested for accuracy.

Pricing

Tariffs and taxes can significantly raise the final price of products. It is critical to understand how these charges will affect sales and pricing. Some online markets are extremely price-sensitive; others are not. International shipping is another aspect of pricing that can prove a deal-breaker for buyers in some markets (see below).

Shipping

Shipping costs can also significantly affect the price of the transaction – especially for international shipments. The cost to the retailer to fulfil orders will vary significantly based on where the inventory is located and what partners they’ve signed up with.

Risk

Expanding into new markets means serving customers with whom you have no transaction history. You might also be facing different restrictions on using data that can help identify whether an order is legitimate or fraudulent.

The countries of opportunity

There are ecommerce opportunities all over the world, but understanding the market size, their struggles and how to succeed is essential. Of course, different countries present different market opportunities that should be explored.

China: The land of burgeoning opportunity

China is still the supersized version of ecommerce when compared to the rest of the world. Chinese ecommerce revenue in 2018 was almost as much as the United States and the United Kingdom combined. Retail web sales totalled 7.18 trillion yuan ($1.149 trillion).

Clothes are the most popular goods to purchase online, followed by food and drink and footwear and toiletries. Chinese consumers don’t trust credit cards. Most use cash on delivery or Alipay, a digital payments system spun off from Alibaba. Consumers also expect free, fast delivery and will base purchasing decisions on your ability to supply that, as well as the promise of free and painless returns.

Japan: Convenience reigns

Japan is the third largest (after China and the United States) online retail market in the world. It’s been growing at roughly 9% a year for the past few years, with 74% of consumers regularly shopping online.

Electronics and media is currently the leading product category in Japan for online sales, accounting for $23.7 billion. Interestingly, the top two reasons that Japanese consumers buy online are based on convenience. A full 71% mentioned being able to buy anytime and 62% like that they “don’t have to go outside”.

75.5% of Japanese shoppers prefer to use credit or debit cards online, compared to 4.5% who like to pay with cash on delivery.

Germany: Online lovers

A full 92% of German internet users have made an online purchase in the past 12 months. Even 89% of over-65-year-old internet users have shopped online in the past year. Germany lags behind only the United States and the United Kingdom in cross-border ecommerce, so online buyers are constantly looking beyond Germany to purchase attractive goods.

Germans’ favourite payment methods are credit or debit cards (29%), invoices (26%) and digital payments (22%). It’s clear that payments are diverse in Germany, so offering a range of payment options at checkout is essential.

Because consumers prefer to shop with recognised local retailers, international sellers should put up a local website with the .de domain.

France: A maturing market

Although not dominant, online retailing in France continues to grow. Like many countries, online spending typically rises at the end of the year, with about 20% of sales coming during the holiday season. A full 80% of French consumers compare prices before buying and flash sales have grown in popularity.

French consumers expect a truly “impeccable” buying experience that combines convenience, speed, reliability and regular reassurance about where their packages are in the delivery process. Due to customer expectations, you’ll probably need to offer multiple delivery options.

South Korea: Mobile shoppers

Ecommerce is critical to consumers in Korea, where 99.2% of households possess internet access. Consumers tend to window shop at traditional stores, then go online to find the best deals.

Mobile ecommerce is driving South Korea’s explosive ecommerce expansion. Whereas online shopping grew by 19.2% last year, mobile ecommerce increased by 34.6%. Mobile transactions represented 61.1% of the total market value of online purchases. Korean consumers are mostly concerned about price when shopping online.

Canada: Open for business

Ecommerce has been slower to take hold in Canada due to low population density, high shipping costs and relatively high sales taxes. But that looks like it’s changing.

Fashion is the leading sales category, followed by electronics and media. Cross-border shopping is extremely strong in Canada, particularly at U.S. online sites. Half of what online shoppers in Canada purchase comes from foreign sites. 75% of Canadian shoppers think free shipping is critical when deciding what site to buy from.

Russia: Comparison gurus

According to the Russian Association of Internet Trade Companies, cross-border sales accounted for a 37% share of online transactions in 2017. Russians tend to compare online extensively before they buy – 58% of consumers compared products, prices and features online before purchasing.

Russian consumers distrust the safety of online ecommerce transactions. Cash on delivery is the main payment method (80%). Price-sensitive online shoppers also gravitate to stores that offer lower prices and purchase 50% of their online goods using discounts and special offers.

Brazil: Mobile potential

Brazil is the largest economy in Latin America. It has 140 million internet users, out of a total population of more than 207 million, which represents 42% of all online retailing in Latin America.

Brazil is the fifth-largest smartphone market in the world. Mobile transactions, which make up 27% of all online purchases, are growing. Brazilians also like to pay in instalments. In 2017, only half (49.8%) of online sales were made in one payment.

International commerce with Brazil can be difficult, however. Not only is taxation very high on foreign goods, but customs can also be very slow. It can take as long as five weeks before customs releases products to the customer. Trademarks and websites should ideally be registered within the country.

There are opportunities all over the world to enjoy ecommerce success. Understanding the international market and the challenges you’ll face is essential for overcoming them. Signifyd enables merchants to grow with confidence by providing its end-to-end Commerce Protection Platform. Powered by the Signifyd Commerce Network of thousands of merchants selling to more than 250 million consumers worldwide, its advanced machine learning engine can protect merchants from fraud, consumer abuse and revenue loss caused by barriers and friction in the buying experience.

The post International Retail Opportunities? ¡Si! Oui! Ja! Da! はい! 是! appeared first on Signifyd.

The evidence of their confidence is clear. A Signifyd survey found that nearly 84% of consumers have no sympathy for retailers who feel the competitive need to accept returns with no questions asked.

Indeed, these modern consumers are not ashamed or sheepish. They return with abandon. They approach retailers with the attitude of, “Hey, you make the rules. We just figure out how to bend them.”

Both legitimate and fraudulent returns constitute one of ecommerce’s most fierce headwinds. Product returns cost UK retailers around £60 billion per year and can account for about 10% of their business.

Retailers must create positive experiences with their customers to forge a special bond that limits their passive attitude to returns. Here, we explore why consumers may have a difficult relationship with retailers, and what you can do to resolve it.

Difficult policies

Return policies can win or lose customers. However, while an open return policy can open your business to abuse, a tight policy may cost you in return customers. Signifyd’s Consumer Sentiment Survey found that when grading retailers, building a better relationship begins with understanding that customers do not understand the true cost of returns.

Shoppers want to be able to return products for virtually any reason. Our numbers show that retailers would be wise to think carefully about their return policies and then express them clearly and in a way that is easy for consumers to access and understand.

What exactly do the numbers say? Firstly, retailers cannot expect much sympathy from consumers when it comes to returns. Nearly three-quarters, 74.5%, said they never feel guilty when returning a product.

When asked whether they feel any sympathy for retailers who feel a competitive need to accept returns whether anything was wrong with the product or not, nearly 84% said either that they’d never thought about the issue or that it was simply the cost of doing business.

Another 9.7% said the situation doesn’t really make sense, but that’s just the way it is. Only 6.6% said they thought the reality was unfair to retailers and that they expected things to change.

That said, nearly three-fifths of consumers, 57.7%, said they carefully check return policies before they buy. Another 33.4% said they just assume they can return an item for any reason.

It’s clear that consumers expect returns to be available, and that they do not recognise their damage. However, a negative return experience can be damaging. For 75% of people, a poor return experience was reason enough for them to stop shopping with a retailer.

So, what’s the solution to building better relationships? Well, 82.6% of consumers said they’d be likely to buy more from a retailer who had offered them a good return experience.

Retailers should be thoughtful about their return policy and present it in a clear way for their customers. You don’t have to provide free returns but be crystal clear about what your conditions are.

Data breaches trust

Finding out that your data has been breached is heart-breaking. You can be left uncertain over what information has been taken, and if it will cause any further security risks for customers in the future. However, consumers are less forgiving than you may expect.

Well over half of the respondents assume their personal data has been stolen in some form of data breach in the past and a like number have seen a fraudulent charge appear on their credit card accounts. A significant portion of those, by the way, say those fraudulent charges leave them with negative feelings about the retailer involved, no matter who is to blame.

This feeling of being cheated breaks trust, and in turn can lead to retailer abuse which damages businesses. While only 8.1% of consumers said that they had filed a claim with your credit card company saying an item was not delivered, even though it actually was, it’s a hard-hitting amount when considering it comes out of the pocket of the business.

And that’s just for starters. Another 6% of survey respondents admitted to keeping a product they were not satisfied with and making up for their disappointment by asking their credit card companies to reverse the original charge for the product.

Drawing a straight line from data breaches and fraudulent charges to bad behaviour on the part of a small percentage of consumers would be impossible to support and potentially unfair to the companies that have been victims of fraudsters and hackers.

But it is clear that data breaches have become a way of life and that consumers are well aware of the potential peril they face because of them.

Retailers should provide transparent and real-time communication. Reassure customers that you have safeguards in place to protect their data and to protect them from fraudulent orders.

Returns aren’t the only awkward customer exchanges

Of course, tackling returns is only part of the equation. As we mentioned earlier, retailers are also facing consumer abuse at a level that they haven’t before. And our survey results indicate that a small but significant percentage of consumers feel entitled and don’t hesitate to take advantage where they can.

The results of consumer abuse often show up in non-fraud chargebacks, often called friendly fraud chargeback. The most common variety of non-fraud chargebacks occurs when a customer says an online order never arrived at their address – chargeback item not received (INR). When they make the complaint to their credit card company, the card issuer takes the charge back – and on behalf of the customer, recovers the money and fees from the retailer accused of failing to deliver the goods.

Similarly, a customer might file a claim if the item they did receive was significantly not as described, also known as a SNAD claim or chargeback not as described.

Such disputes are the most fraught for retailers, who can fight the consumer’s claim, but by doing so the merchant is calling its customer a liar. After all, things do go wrong. Packages are stolen off porches. Packages get lost in transit. Items are inadvertently poorly displayed or described on ecommerce sites. Customer issues can certainly be legitimate.

But sometimes customers seek to take advantage, and the real trick is to know when the customer is right and when the customer is gaming the system.

Overall, 64.8% of our survey respondents said that they had filed a chargeback. The biggest reason respondents gave for filing a chargeback was that the item never arrived – 25.3% said that was their experience. Another 10% said the item that arrived did not live up to expectations, given the description and presentation on the merchant’s site.

Nearly 18% said they hadn’t made the purchase they were charged for, and 11.6% more said someone used their credit card without their permission.

Members of the 18% were likely fraud victims. The second group no doubt included those who had children or other relatives who used their card without their knowledge.

Ultimately, communication is key to building stronger relationships with retailers. Retailers should confirm their customers’ orders immediately and lay out the timelines for delivery. Quickly communicate any snags in fulfilment and tell them what to expect under the new circumstances.

For consumers, controlling their commerce destiny has become like breathing – a daily activity that takes place without even thinking about it. Retailers need to embrace that reality and celebrate the fact that there are willing consumers out there who want to buy what they are selling.

The fun part for retail professionals is building experiences that allow their customers to do that without encountering the kind of friction that setting up protective barriers generates. It takes a certain fearlessness, a confidence that the enterprise is protected by the systems and people that have been put in place to do just that.

The post How Retailers Can Create or Rekindle Customer Love appeared first on Signifyd.

Global ecommerce continues to accelerate. In 2020, it reached £3 trillion and is expected to achieve £4.5 trillion in sales in 2024.

There are now more opportunities than ever to seize large chunks of the market. Businesses are investing in innovative new technologies, international expansion and multichannel initiatives. However, one core focus of these investments directs attention to the customer experience. Ultimately, that’s the best way they can differentiate themselves in an increasingly crowded marketplace.

Here, we explore nine ways in which your business can grow its share in the competitive ecommerce market.

Improve website performance

Digital performance is key to the success of online retailers. If you force your customers to wait as your page loads, you’re probably going to lose them. According to a Google study, two seconds is the absolute limit of time you can expect your customers to wait before they’ll abandon you.

Even the BBC found it lost an additional 10% of users for each additional second its site took to load. Every second counts online. Invest in tuning your website so that it loads properly – especially on mobile platforms. It’ll pay off for you.

Personalise the customer experience

Almost every consumer realises today that personalisation is a two-way street. They have to give you data – voluntarily – and agree that you can use it in the ways you specify.

In fact, 63% of consumers are interested in personalised recommendations from the ecommerce stores they shop at, according to Accenture. Plus, most of them are willing to share their data in exchange for some additional benefits:

• Coupons and loyalty points: 64%
• Exclusive deals: 60%
• Gain points and rewards: 56%
• Special offers for items that interest them personally: 53%

Go global

In 2019, Nielsen reported that 24% of shoppers will buy from an overseas retailer for premium goods. This is up five percent from 2016, showing a clear trajectory of growth for international markets. If your customers aren’t shy about crossing borders to get the goods they desire, why should you remain focused on your own backyard?

Although international ecommerce expansion is a key growth opportunity for retailers, it can be a daunting prospect. You have to deal with:

• New currencies
• Different languages
• Different buying habits
• Unfamiliar fraud threats
• Logistical and distribution challenges like taxes and trade agreements and customs paperwork.

Luckily enough, a number of service providers have stepped up to do these things for you. You shouldn’t have to worry about getting on the global ecommerce stage.

Establish (or expand) your physical presence

Despite all the rumours of its death, physical retail is actually in a period of transformation. But little has been made of the fact that a large number of new physical stores opened as well. Boring retail might be dead. But exciting, innovative hybrid brands like Apple, Sephora and others are thriving.

Why is this happening? Because stores that have survived the collapse of retail space are places people want to visit. If you provide the right customer experience and make a true commitment to omnichannel retail, the customers will come.

Be socially responsible

Consumer sensitivity to sustainability and diversity are also creating new revenue opportunities for ecommerce retailers. Today, consumers will pay more for:

• Ethical business practices
• Authenticity
• Branding that mirrors their diversity

A 2015 Nielsen survey investigated consumer behaviour of 30,000 people across 60 different countries. Across the board, consumers are willing to pay extra for one thing: sustainability. This is especially true for millennials. Impressively, while 66% of all global consumers are willing to pay more for sustainable goods, a further 73% of millennials are. Who said it ain’t easy being green?

Offer ultra-convenience and gratify customers instantly

Convenience was an early driver of ecommerce. Most signals indicate that it remains a deciding issue when consumers are weighing whether to shop online or in stores. It also determines how much they are willing to pay.

Today, convenience is at the core of the success of digitally native retailers. They offer friction-free ordering interfaces, liberal return policies, or try-and-buy programs. This makes it simple to try out several pairs of jeans before picking a winner.

Don’t treat your customers like fraudsters

Fraud continues to eat into online retailers’ margins. And it isn’t just because of fraudsters making off with goods without paying – it’s the fear of fraud causing merchants to erect barriers that degrade the customers’ buying experience.

In fact, false declines, or withholding legitimate orders for fear of fraud, costs retailers more than what they spend on trying to prevent fraud, according to Business Insider.

In a Signifyd survey of 2,000 consumers, 65.5% of respondents said that they would not shop with an online retailer again if that retailer declined an order for no apparent reason. This is a typical false-decline scenario.

Forward-thinking retailers, including many of the digitally native operations, have turned to a relatively new model of enterprise fraud management called guaranteed fraud protection. The model combines big data, machine learning and a financial liability shift to transfer the burden of fraud from the merchant to the fraud-protection provider. While the guarantee is a strong positive alone, the machine learning aspect can sift good orders from fraudulent ones in milliseconds. Ultimately, this means more good orders for you and your business.

Remove barriers from the buying process

The fear of fraud is just one barrier being built by online merchants. Other barriers include the requirement to either create an account or log into social media accounts before ordering online. A consumer experience survey by Signifyd showed that 37.6% of consumers found needing to create an account or log in annoying or very annoying.

So how do you reduce this frustration? Well, the best thing you can do is remove barriers to checkout. This means having a guest checkout method where no account is needed. You should also accept as many online payment options as possible.

Go mobile-first

More than six in ten smartphone users have used their phones to buy online within the last six months. Major retailers have offered dedicated apps for years to improve the mobile experience for their customers.

Now, mid-sized and even small online retailers are developing custom apps to drive sales as well as customer loyalty. One study by mobile app platform Poq showed that conversion rates among dedicated storefront apps are approximately 40% higher than those of mobile sites. Average session duration and average order value were both considerably higher.

As you can see, there’s no one way to grow your ecommerce margins. In fact, employing any one of these techniques can help your business sustain some healthy profits. Whether you improve your website performance, promote your sustainable strategy, or prevent fraud and encourage genuine purchases, you can ensure that your business survives in this competitive and large marketplace.

The post Outperform Ecommerce: How to Grow Your Share appeared first on Signifyd.

But as the ecommerce market grows and businesses thrive online, how does one get an edge on their competition? There are more aspects of your business to consider than order management and distribution. So, in order to concentrate your efforts on business development, automated services could play a vital role in your customer experience strategy.

Here, we explore ways in which order automation management can boost the customer experience, exploring topics such as customer communication, varying delivery options and payment security.

Order confirmation

As soon as the payment is confirmed, your customers are waiting for the order to arrive. Sitting patiently by the window, they’re looking out for the delivery driver to pull up with their new clothes or the latest gadget. But how do consumers know that their order is prepared, on its way and when it will be delivered? Well, the answers should be in their emails.

As soon as an order is placed, automated services can confirm the purchase and send the customer an email that says as much. It’s an assurance that customers appreciate. Actually, it’s an assurance that they expect — and speed is key to making it a positive customer experience.

Signifyd’s consumer survey found that 41.9% of people expect a confirmation within minutes of their order. Only 8.5% of people said they would wait any longer than a day.

Creating a positive customer experience is built on meeting their expectations. In this sense, only an automated service (or superhuman) could generate an order confirmation within minutes. Continuing with communication, emails should also indicate the delivery process, including dispatch and delivery.

Delivering positive experiences

While online orders offer the convenience of having items delivered to your front door, some consumers prefer the option of picking their packages up in-store. Today, merchants are recognising a growing taste for click and collect.

Omnichannel initiatives are essential for creating positive customer experiences. It’s also good for business. 37.6% of merchants who offer omnichannel initiatives do so to attract customers who make additional purchases, according to Signifyd market research. 12.4% do so to gain an edge on Amazon, a giant of consumer convenience.

If merchants want to offer initiatives such as BOPIS and a variety of delivery and purchasing options, automated order management is essential. When products are ordered to store, delivery addresses are not required. However, this is a key driver in identifying the consumer and protecting the business from fraud.

Only through automated Merchant Fraud Prevention platforms can merchants be assured those orders are legitimate and safe, without creating friction for customers in the checkout area through additional checks.

Asking for additional authentication can also raise suspicions from consumers. Furthermore, if a legitimate order is declined, it may lead to brand abandonment. In fact, 36% of consumers said that they would no longer buy from a retailer if they had been declined for fraud for no apparent reason, according to Signifyd’s consumer survey. While choice is key to creating positive experiences, merchants must ensure that these options can proceed without friction or difficulty.

Automated security

As Strong Customer Authentication (SCA) becomes more common in the UK and the EU, consumers should expect to see more friction and difficulty completing the purchases. Today, consumers need to be verified through two-factor authentication. This means they need to demonstrate at least two of something they know, something they own, or something they are. This may be knowing a password, owning a phone, or using a fingerprint to complete a purchase.

However, asking for all this information from consumers is arduous and makes for a negative customer experience. Signifyd’s survey found that 30.6% of consumers would say that multiple steps to verify their identity would be a reason to not shop with a specific online retailer again.

Instead, automated order management can verify a customer’s identity with intelligent machine learning, identifying low-risk consumers and exempting them from additional checks. Using this automated service has many benefits for merchants. Firstly, they are 100% protected against fraudulent purchases. Secondly, with an easier checkout, customers have an improved shopping experience and are more likely to return.

Automated order management can help you boost the customer experience by delivering speed, convenience and choice. However, as a tool for your business, you can increase revenues through intelligent fraud protection to curate a secure checkout for consumers.

The post Automate Order Management to Increase Customer Experience appeared first on Signifyd.

Part of this directive includes Strong Customer Authentication (SCA), a process that verifies the identity of consumers as it attempts to block fraudsters from abusing businesses or harming customers.

Here, we explore what PSD2 strong customer authentication regulation and SCA change for your business, how they affect your checkout process and what you can do to boost customer experiences and revenue with intelligent and ccompliant payment fraud protection for ecommerce.

What does SCA require?

It does what it says on the tin: Strong Customer Authentication verifies the identity of a customer and it does so with a firm hand. SCA PSD2 solutions requires consumers to prove two aspects of their identity from three choices.

Customers need to prove at least two of these ideas:

• Something they know, such as a pin code or password.
• Something they own, like their mobile phone.
• Something they are – think of fingerprint scans or facial recognition.

There are exemptions to SCA, where the risk of fraud is reduced. If a transaction is under €50, it would qualify for a low-value exemption. However, five consecutive low-value purchases – or if those total payments exceed €100 – will trigger payment SCA being required. Recurring payments, such as subscriptions, are also excluded, but only after an initial SCA.

There are more ways that merchants and customers could be exempt from an SCA, including using an intelligent chargeback fraud protection platform that approves customers for low-risk exemptions, but more on that in a bit.

Ultimately, by proving customer identities, a business can have a level of assurance that their customers are legitimate. It adds a layer of security. However, there are still holes in SCA and authenticating platforms such as 3D Secure that means fraudsters can sneak past basic defences and the customer experience is damaged.

Friction at the checkout

While SCA should help prevent fraud and create a more secure checkout for consumers and merchants, it could be doing more damage than good. This is because it extends the checkout process, creates more touchpoints and creates barriers to completing payments. For customers, it can count as a negative experience and for merchants, it can hit them where it hurts – profits.

SCA may require customers to enter more personal details than they are previously used to or be forced to log in to an account or social media to verify their identity. However, it’s clear that these steps are a nuisance for consumers.

Signifyd’s consumer survey proves as much. When asked for reasons why they wouldn’t shop with a specific online retailer again, 30.6% of consumers cited multiple steps to verify their identity. Meanwhile, 28.5% said requirements to create or log in to a retailer account was a reason to stop shopping.

In the end, payments consultancy firm CMSPI predicts that €85 billion in sales will be lost in 2021 because of transactions subject to SCA that retailers are not prepared to handle seamlessly.

“Then what is the solution to being SCA compliant while creating a frictionless checkout experience?” you ask. Well, the answer is simple – a SCA PSD2 solutions for your ecommerce store.

Fraud prevention solutions

You can make your business compliant with PDS2 regulation and improve your security, reduce fraud and abuse and make the customer experience one that will encourage returning customers.

Remember how there are qualifying exemptions to SCA? Well, fraud protection platforms such as Signifyd can help identify customers through intelligent machine learning, assessing their risk level. If they are identified as a low risk, then they may be exempt from SCA, meaning that the checkout process is easier for all.

How does it work? Big data is used to build a profile of customers, utilising their purchasing history. This assesses the likelihood of abuse or fraud and points out any suspicious activity.

It also avoids any awkward interactions. If you incorrectly block a legitimate customer because you believe it may be a fraudulent purchase, you’ve created a negative experience. Signifyd’s fraud protection platform minimises this risk and offers 100% protection against fraud and abuse. So even as fraud changes as SCA becomes more common, chargeback fraud can be reduced. This not only creates a good customer experience but can give you a significant boost to your revenue.

Using a fraud protection platform can be an integral part of your PSD2 SCA solutions. By seeking exemptions and eliminating risk, fraud and abuse, you can create positive customer experiences through seamless checkouts and take your ecommerce store to the next level.

The post PSD2 and SCA-Ready Fraud Protection for Ecommerce appeared first on Signifyd.

While curbside pickup, the trend of buying online and picking products up outside of a physical store (sometimes without even having to leave your vehicle), seemed to be a blip of consumer behavior before the innovation of next day home delivery, the pandemic has revived it as a viable option for retailers. The resurgence of curbside pickup may have been born of the pandemic, but it will not end with the virus.

With buy-online, pick-up-at-the-curb (BOPAC) here to stay, retailers need to sketch out strategies for a way to offer the service for the long term. Here, we explore some of the challenges and benefits of providing curbside fulfillment; and it will lay out the best practices from noted retail leaders.

The peak of BOPAC

Signifyd’s Ecommerce Pulse data showed a breathtaking increase in orders involving online purchases picked up in or at the store. Within a month of the pandemic’s official start, BOPAC orders on Signifyd’s Commerce Network had increased by more than 450%. Although the number of buy-online, pick-up-at-the-curb orders dipped during the lockdown breaks, with many non-essential stores open again, BOPAC orders were still 175% higher than their pre-pandemic level.

The truth is, curbside was not a common offering among retailers before the pandemic. Digital Commerce 360 reports that as of last year, only 17 of the Internet Retailer Top 1000 offered BOPAC.

That picture has changed. While the number of retailers offering curbside pickup remains a moving target, the adoption of curbside by consumers is an indication of retailers’ embrace of the channel. Half of consumers have turned to curbside and in-store pick-up because of COVID-19.

This finding was part of an April poll that also found that 25% have relied on BOPAC more than once. 75% were also interested in trying it. Even better, 90% who had tried BOPAC found the service convenient.

When nine out of 10 people find something convenient, you can be pretty sure it’s going to catch on. Not only is the 90% figure a sign that curbside pickup is here to stay, but it suggests that there is a bright future of convenience for this method of shopping.

Capturing new customers

BOPAC is a key way to capture a new wave of online shoppers. The National Retail Federation reports that 45% of baby boomers say they are shopping online more because of the pandemic. They are more aware of pick-up-in-store options than other age cohorts, NRF says in its blog post, and 30% of them have used curbside pickup.

When you consider that baby boomers likely make up a significant portion of the new online shoppers that the pandemic has created, a BOPAC strategy becomes all the more valuable. Simply put: One way to keep the new shoppers a retailer has acquired because of the pandemic is to offer them shopping methods that line up with the way they want to shop.

Some retailers and experts have argued that despite its popularity, retailers shouldn’t be too hasty about going all-in on curbside pick-ups. The fulfillment channel, the argument goes, has all the costs and logistical challenges of buying online pick up in-store (BOPIS) buy online pickup in store, without the benefit of getting shoppers into the store, where they make impulse purchases.

However, BOPAC offers money-saving convenience for consumers, meaning that they are more likely to return to the store for goods they need. Curbside pick-up could well become a competitive advantage, just as in-store pick-up (BOPIS) did. In a 2018 Signifyd survey of executives at enterprise retailers, 44% said BOPIS provided a competitive edge, including 12.4% who specifically mentioned Amazon. While Amazon can be considered a master of convenience, can BOPAC offer even more accessibility that this ecommerce giant does not?

Doing BOPAC right

While the concept of picking up products from outside a shop seems simple enough, there are several key factors in play to ensure that it is a success and drives more business.

You need to be obsessed with communication. Start on your website, setting clear expectations on your curbside pickup process. Follow up orders immediately with a confirmation email that includes pickup instructions and an accurate estimate of when the order will be ready. During the pandemic, politely require customers to wear face masks at pickup. Consider explaining that the requirement is for the good of both customers and your employees. Follow up with an email when the order is actually ready. Repeat all the instructions, including asking customers to have the confirmation email with them when they arrive.

Analyze your risk management strategy and tools. Consider an automated fraud and consumer abuse solution, like Signifyd, which combines big data and machine learning to instantly identify legitimate from fraudulent orders. BOPAC orders come with no delivery address, which means fraud reviews need to be conducted without some key pieces of data to confirm identity.

Designate and signpost a dedicated pickup area. If possible, a section of clearly marked parking spaces works better than literally lining cars up along the curb. If you do rely on a curbside line, mark the lane clearly and use signs to instruct drivers to stay in their cars throughout the pickup process.

As you rush to buy online, pick up at curbside, keep one thing in mind: This isn’t just an initiative to get through the pandemic. This is an initiative that propels retailers into the future of omnichannel.

The post Conquer Curbside Pickup for the Post-COVID Era appeared first on Signifyd.

While primitive versions of the service have been around for decades, changes in technology, competitive strategies, consumer habits, and customer expectations have led to a BOPIS boom.

Signifyd’s survey of 250 decision-makers representing BOPIS retailers paints a picture of large retailers who see in-store pickup as a must-have in this modern world of ecommerce. Here, we explore their ideas and how they are approaching logistical challenges and added fraud risk by providing the service.

Why do consumers pick up in-store?

Like most retail innovations in the digital era, the BOPIS boom has been driven by consumers. According to one JDA survey, 40 percent of consumers turn to BOPIS to avoid delivery charges. Meanwhile, 33 percent use BOPIS to get their items quickly. Convenience was cited by 12 percent of people, and eight percent of people use BOPIS because they want to browse a store while picking products up. Finally, seven percent said they feel more confident that their items will end up in their hands if they pick them up themselves.

Whatever their reasons for turning to BOPIS, consumers appear to be racing ahead of retailers when it comes to the trend. Research firm L2 reported in 2017 that only 47 percent of retailers in the United States and the United Kingdom offered pickup of online orders in stores. However, as the pandemic drove lower personal interaction, in-store pickup has exploded into the sphere of nearly every retailer that has a high street presence.

What makes BOPIS so hard?

It turns out that BOPIS is one of those things that is much easier to talk about than it is to actually do. It’s not the sort of innovation that retailers can adopt overnight. Buy-online pickup-in-store requires additional procedures because it is a card-not-present transaction in which the retailer or its fraud-protection vendor shoulders the fraud-risk burden.

While the trend is often referred to as a win-win for consumers and retailers, BOPIS is, in fact, more of a win-lose: Consumers get convenience and fulfillment options, while retailers get logistical headaches and a new avenue for fraud losses because the online shopper no longer gives a delivery address, which provides valuable data to confirm a shopper’s identity.

The logistical struggles start with the fact that retailers have traditionally run their brick-and-mortar stores and their online worlds as separate channels. Each of those sales channels is complicated enough on its own, but unifying them and adding in other siloed operations, such as catalog sales and customer call centers, adds to the complexity.

But you can’t compete without BOPIS

Whatever the challenges, it seems that today, more than two decades into the ecommerce era, providing pick-up-in-store is not simply a nice-to-have from a retailer’s perspective. It’s a must-have—and right now.

But knowing that something is valuable and doing that something successfully are two different things.

Retailers who have launched BOPIS appear to be confident in their ability to deliver—or, in this case, to not deliver—according to Signifyd’s survey of retail enterprises. But that isn’t to say there aren’t significant concerns among respondents.

44 percent of market leaders said that providing the service was a competitive imperative, including 12.4 percent who said BOPIS gives them a competitive advantage against Amazon.

Another 37.6 percent of respondents said the biggest boost from BOPIS was the additional purchases consumers make when they show up to pick up their orders.

However, doing BOPIS right requires a near-perfect insight into inventory across the in-store and online channels. And not just a general idea, but a knowledge of where each individual piece of inventory is at any time and where it needs to go in order to meet the needs of a buy-online-pick-up-in-store customer.

BOPIS changes everything for store associates

Offering BOPIS means retailers need to train store associates to pick and pack orders from store shelves or backrooms. It means employees need to be ready to serve customers quickly when they arrive at the store or risk defeating the whole purpose of BOPIS.

It also means that associates need to understand the unique fraud vulnerabilities that BOPIS exposes a retailer to. It means the associate needs to know how to determine that the credit card account used to pay for the order actually belongs to the customer standing in front of him or her.

Among the large retailers surveyed by Signifyd, 40.4 percent acknowledged that offering a pick-up-in-store option created increased fraud concerns. In particular, 25.2 percent put their fraud losses from BOPIS in the 3 to 10 percent of revenue range. That’s a staggering percentage by fraud standards.

Another 42.8 percent said BOPIS fraud losses represented between 0 to 1 percent of revenue.

It’s practically inevitable that when there is a new way to purchase something, new ways to cheat the system will follow. In the case of BOPIS, the fraud play isn’t very complicated. The fundamentals are the same as with more traditional ecommerce fraud. A fraudster, or more likely a fraud ring using stolen identities, makes an online purchase. Or perhaps the fraudster or ring makes the purchase from a legitimate online account that they have infiltrated.

While the best fraud-protection systems look at a host of outside data to determine whether an order is legitimate or fraudulent, one extremely valuable piece of information is the delivery address in the order.

Protecting retailers

Photo IDs and signatures are the tools of choice to protect retailers. A government-issued ID was the most popular form of identity verification among the retailers Signifyd surveyed, with 76 percent of them saying it was sufficient to pick up a package. Allowing respondents to select more than one choice, 52.8 percent said that asking for the credit card with which the merchandise was purchased was sufficient at authenticating purchases.

Meanwhile, 82 percent of retailers said they require a signature before a customer can leave with an order. While it’s a common-sense requirement, it’s only of value if an associate has an established signature with which to compare it.

Having a better BOPIS service

So given that the importance of BOPIS is growing and that all signs are that it is going to be an increasingly important channel in the future, what should retailers do to make sure they are providing the kind of ordering and collecting experience their customers demand?

The following tips were assembled from a variety of retail experts:

1. Train your associates. They need to learn how to stand firm when customers show up without proper identification, while at the same time avoiding insulting legitimate customers who simply forgot the documents they need.
2. Communicate, communicate, communicate. A BOPIS customer should never be wondering what is happening with their order. Send immediate confirmation when an order is placed, explaining that another email or text with all the details needed for collection will arrive when the order is ready. When the order is ready, send another message that includes store directions, explains exactly where to go in the store, lists the identification needed to pick up the order, says how long the order will be held, and offers a contact method for those with questions.
3. Combine your online and in-store order management and inventory systems. You need absolute insight into your inventory — what you have, where it is, and how quickly it can get to the store where it needs to be for pick up.
4. Make sure your BOPIS is a thing. Don’t have BOPIS customers line up with traditional customers. Create a dedicated space for in-store pickup staffed by associates who are BOPIS experts.
5. Consider automation. Consider kiosks that can authenticate identity before the customer reaches an associate and an inventory control system that helps an associate know the exact location of an item needed for pickup.
6. Follow best practices when it comes to fraud protection. Consider a customer’s order history. Have you seen this customer before? Has he or she previously ordered online? Has he or she used BOPIS before? Have orders from the same customer come in unusually quickly or in unusually high numbers — even at other stores under your brand? Design systems that can protect you from fraud while still delivering the customer experience your shoppers expect.
7. Test your BOPIS procedures with a secret shopper program. Just over 63 percent of the retailers surveyed for Signifyd use secret shopper testing. Be sure to design the program as an educational tool, not a punitive program, to avoid demoralizing your associates.

BOPIS is still a relatively new flavor of the shopping experience. There is still time to get it right. The bad news? Getting it wrong is costly, both in terms of customer loyalty and lifetime value, and in losses due to fraud.

The good news? There are those who have figured out how to tap into the profit potential of BOPIS in both the short and long run. And there is help to be had in starting up or shoring up your buy-online-pick-up-in-store game.

The post Risk and Rewards: Buy Online Pick Up In-Store appeared first on Signifyd.

Retail is changing. And while we’ve seen dramatic shifts in seller and buyer behavior, it’s clear that this transformation is only just beginning. Ecommerce has become just commerce. Omnichannel shopping has become just shopping. For shoppers, there is an expectation that they should be able to buy anything, at any time and through any channel.

The power of ecommerce allows shoppers to switch without so much as a thought between the most known brands in the world to businesses that are born of the digital age.

Of course, these changes have not just changed the face of retail. They have also changed how consumers relate to retailers. Here, Signifyd’s survey explores consumer sentiment in the midst of the retail reinvention.

What are zero-tolerance shoppers?

In the era of mobile shopping, personalized experiences and quick delivery, it’s more than customer expectations that are on the rise. Their belief that it is the retail brand’s responsibility when something goes wrong has increased too, no matter how many vendors touch their experience from the time they start their shopping search to the time they are reaching out for post-purchase support.

Retailers must exceed those expectations to thrive, giving substantial pay-off for consumer’s heightened experience. But in a world where social media can destroy a brand overnight, the dangers associated with business as usual can be precarious.

Our survey reveals the high expectations of consumers, for merchants at every level of the food chain. These high expectations and the attitude that the buck stops with the retailer have a special significance in an era of digitally native retailers and merchants who are taking market share from legacy retailers. Meanwhile, legacy retailers are focusing on making a digital transformation that will keep them competitive with the upstarts and Amazon.

The competitive playing field has been leveled. It doesn’t matter how large or small a retailer is. Every order and any corresponding communication and engagement with the retailer comes with heightened expectations—and the first job for retailers is exemplary execution.

How many chances do you get?

We asked consumers: “How many times would they tolerate a negative experience and stay loyal to an online retailer?” The answer? Not many. After a single negative experience, it was found that 14.6 percent of people wouldn’t give a retailer another chance. These are your true zero-tolerance customers. After this, 38.2 percent would tolerate one negative experience, and 38.4 percent would only tolerate two negative experiences.

However, if you’re prone to mistakes, unfortunately only 8.9 percent of customers would tolerate three or more negative experiences.

But what could be souring the relationship between merchants and consumers so much that a majority of people would only tolerate one or less negative experiences? Surely, it would have to be something bad. Not necessarily, as our survey found.

The surprising negatives

If you think that you’re immune to creating negative experiences, we’ve got some bad news for you. As it turns out, the negative shopping experiences which deter returning customers are fairly surprising. In this sense, some shopping experiences that you may consider as standard practice in the online world are actually making it more difficult for your customers to shop and engage in retail loyalty.

We asked consumers: “Regardless of if it’s happened to you or not, which one of the following might be a reason why you wouldn’t shop at a specific online retailer again?” The results may shock you.

Some reasons why customers would not return to an online retailer include:

• Being declined a purchase by a retailer when there wasn’t a problem—57.6 percent
• Being directed to another site for credit card verification—41.7 percent
• Receiving your purchase after the expected delivery window—38.1 percent
• Not allowed to deliver to an alternative address (not the one associated with the account)—36.1 percent
• Multiple steps to verify your identity—30.6 percent
• Requirements to create or log in to a retailer account—28.5 percent

Some responses are unsurprising, such as receiving your purchase after the expected delivery window. However, you’ll likely find some of these ideas as the standard on many online retail websites. How often have you had to experience multiple steps to verify your identity or been forced to log in or create a retailer account?

One thing is clear: Customers are emphatic in letting you know what they’ll stand for when shopping at your online store.

The solution

It’s clear that zero-tolerance shoppers are a little ruthless in their approaches to shopping online. Aspects that you may have considered standard practice as online retailers are now negative experiences and making just one of them could destroy a customer relationship in an instant. However, the solution is simple: Make more positive customer experiences.

Consumers are clear about what they won’t tolerate, so how do we avoid these obstacles? Efficiency, support and selection are key.

Our survey found that 40.9 percent of consumers would expect a confirmation of their order after purchasing online within minutes. In fact, only 8.5 percent of people would allow longer than a day for confirmation.

Meanwhile, 20 percent of people do not shop with online retailers after a late delivery of an online order. And at 36 percent, even more shoppers have not returned to a retailer after they had been declined for fraud for no apparent reason.

Retailers must follow these essential rules to avoid this:

• Avoid building walls between you and your customers due to fear.
• Don’t treat your customers with suspicion. Treat them like celebrities.
• Make in-store pick-up a centerpiece of your omnichannel strategy.
• Be proactive when circumstances mean promises can’t be kept.

Retailers are increasingly trusting end-to-end commerce protection platforms, such as Signifyd, to help them ensure that positive customer experiences are created. Powered by the Signifyd Commerce Network of thousands of merchants selling to more than 250 million consumers worldwide, its advanced machine learning engine can protect merchants from fraud, consumer abuse and revenue loss caused by barriers and friction in the buying experience.

The post Thriving in a World of Zero Tolerance Shoppers appeared first on Signifyd.