Of course, higher business transactions mean greater vulnerability to fraud. This has given rise to another, more concerning trend – new buyers are turned away by traders for fear of fraud, a phenomenon known as New User Missed Opportunity (NUMO). NUMO causes massive loss for e-merchants as they lack a great chance of converting potential buyers into loyal lifelong customers.
Statistics show that 40% of customers who were turned down the first time will not even try this website again, which is a huge loss for e-merchants, not only from a business point of view, but also from a business point of view. brand reputation.
Reasons for the decline
Asking for too much personal information or data scares new customers; they’re reluctant to share their information with a new store for fear of a breach, resulting in higher cart abandonment rates and missed customer acquisition opportunities.
Additionally, in a situation where new buyers can be the engine of business growth, many are turned away due to the merchant’s fraud prevention systems that do not have sufficient identity data about them. . This data includes purchase behavior and history, in-store interactions, including item returns or exchanges, coupon usage, loyalty or reward point memberships, personalization of interactions, past actions and connected identities of other e-commerce sites.
Due to limited visibility, merchants can only see data from their sites, losing all customer details. This results in frequent false positives regarding fraud, an increased number of declined transactions and, in turn, lost customers forever. Up to 75 times the income can be lost by traders due to these false declines, which is actually a larger number than the losses due to fraud.
How to prevent it?
Risk management should be seen as an engine of business growth, and not just as a means of preventing fraud. It can enable merchants to capture as much revenue as possible by approving more customers based on reliable verification mechanisms. The right approach to risk management can give an e-commerce brand the ability to increase customer lifetime value. In this business, the need for the right risk management partner is vital.
For example, Forter, one of the leading online fraud prevention companies, offers precise identity-based fraud prevention mechanisms to assess the trustworthiness of each shopper in real time. By helping several Fortune 500 companies with their business growth, Forter has become a trusted name in fraud prevention and risk management.
The machine learning capabilities and robust data from a global user base that Forter brings enables online merchants to make real-time transactional decisions and eventually reach new heights in trading positioning and brand. The power of data combined with the Forter network promotes visibility and optimization of business processes, and in turn ensures the best customer experience.
Your data is the key to your transactional decisions; and your decisions need to be fast, accurate and secure. Have you adopted the right fraud prevention solution and have you already started your path to higher income? If not, then now is the time!
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