The "dirty secret" of anti-fraud technology

Posted by Pat Phelan on August 22, 2014

Everyone knows that fraud is a big problem. It costs merchants around $20 billion per year – around 0.9% of revenues lost – and blocking it is important. But...

The "dirty secret" is that blocking fraud costs companies far more than their actual fraud losses. Let me explain. The default stance towards fraud is "defensive": if an online transaction seems fishy, then block it. But this ends up blocking a huge amount of genuine customers, around 3% of revenue opportunities, according to research.

It's revenue left on the table: people who are traveling, or on a new device, or shipping to an address that's not their home, or buying virtual goods (like a plane ticket!), or simply living in a "high-risk" country.

Average net margins in retail are extremely tight, less than 3% of total revenues:

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That's why our data fingerprinting antifraud technology is so valuable to retailers: it doesn't just eliminate the 0.9% of fraud, but it also taps the "hidden" 3% of revenues by spotting good customers, wherever they are, and not blocking them.

We'd love to talk to you about how a simple, painless integration of Trustev can add that 3.9% total onto your margins instead of letting it disappear.

 

 

Topics: fraud, ecommerce