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BizReport : Ecommerce archives : March 31, 2015

Online fraud prevention processes leading to loss of genuine sales

As online retailers battle with fraud by implementing authentication and verification processes, those same processes are costing them as much, if not more, in lost sales due to frustrated shoppers, according to a new report from ThreatMetrix.

by Helen Leggatt

In their new report, 'Are You Treating Your Customers Like Criminals?', ThreatMetrix reveals the frustrating situation faced by retailers who, while trying to prevent fraud, are also risking abandoned purchases due to the extra verification processes needed.

While the cost of online orders lost to fraud amount to nearly £3 billion in the U.K., ThreatMetrix claims that fraud prevention processes put in place could be costing them even more in lost business. That's because retailers' loyal shoppers are being turned away because web fraud systems often lack the ability to identify them as genuine shoppers.

final-report-300x212.pngAccording to Tony Larks, Director, Communications, EMEA, at ThreatMetrix, even if a shopper is accepted "many ecommerce regulars are turned off by burdensome second level authentication such as 3DSecure, and abandon their basket".

Compounding the problem is that many shoppers now log on from multiple devices and may not be recognized if they log in from a mobile device.

"A new approach is needed to create a frictionless online customer experiences. Instead of pouring budget into manual checks to stop legitimate customers falling into fraud filters, retailers need to adopt a single platform that provides comprehensive context-based authentication and personal recognition," says ThreatMetrix. "By treating people like people, businesses can provide real-time defence to minimise credit card fraud and account takeover risks, while keeping the customer experience hassle-free and protecting their account login."

Image via Shutterstock

Tags: ecommerce, fraud, retail

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