Transforming Payment Data into Fraud Protection

Australia is fast becoming a cashless society with consumers rapidly switching to electronic payment methods. According to the Reserve Bank of Australia, 2016 saw credit and debit card payments overtake cash for the first time, with cards accounting for almost half of all payments. In the same year, the rate of Australian card fraud also increased to AU$534 million, with card-not-present accounting for AU$175.6 million of all fraud.

It is evident that the increased use of electronic payments presents an interesting dilemma for retailers. On one hand, electronic payments offer the latest innovations in payment technology, often improving customer convenience and experience. On the other hand, electronic payments are an opportunity for fraudsters, creating problems with transactions and customer loyalty.

The key to solving this dilemma may lie in all the payment data retailers are sitting on.

Data rich opportunities

With increasing competition in the Australian retail landscape, most notably Amazon’s arrival on the scene, retailers in the country are looking at creating choice for consumers and contributing to better customer experiences. As retailers add sales channels to the mix, it is important to consider unifying the experience across platforms around the single customer.

Most retailers with online offerings already have customer data profiles. By adding payment data into the system, retailers now have a holistic view of their customer. Brick-and-mortar stores traditionally have limited data on file but through unified commerce, retailers can gain an understanding of who their shopper is using the following metrics:

  1. A view of unique shoppers through each transaction
  2. The number of shoppers per channel
  3. A breakdown of new and existing shoppers
  4. Who are the loyal, repeat shoppers

With these insights, brands can understand who their customer is, their buying behaviour and journey across channels.

Unified against fraud

By adopting a unified commerce approach, retailers are able to look at a customer’s transaction history rather than just the retailer’s history of transactions. Algorithms built into payment platforms can link transactions across all channels and identify high value tokens (cards that are kept on file for one-click shopping), credit card aliases (card numbers used repeatedly), or high-quality ecommerce indicators (delivery address or email). This allows brands to identify customers instantly – no matter the channel.

Many payment platforms also offer an integrated risk management system that analyses payment data to create shopper profiles using their device, location, and other customer behaviour information. One example of how this can be achieved is through location mapping. By identifying the longitude and latitude of transactions, fraud analysts can turn the IP into a physical location, providing a heat map of consumer shopping behaviour – which in turn can identify suspicious transactions. By having real-time visibility between retail locations, merchants have the tools to stop fraudulent card attempts from going on a spending spree.

Reducing friction and building customer loyalty

Customer loyalty is about providing a frictionless experience from start to finish, and fraud prevention is at the core of this. Unified commerce enables retailers to track, manage and prevent fraudulent card transactions through increased visibility. The data insights gathered through this approach also allow brands to tailor their customer experience to encourage loyalty. It gives brands a holistic view of the transaction journey, highlighting shopper preferences and a more convenient check-out for repeat customers. By identifying the same shopper, no matter the channel, brands can offer an increased protection against fraud and a seamless shopping experience, critical to building customer loyalty.

On 14th September, Brian Dammeir, Head of Product for Adyen hosted a live, fireside chat webinar with Power Retail on emerging fraud trends, cross-channel insights, and why a proactive, smart and data-driven risk management approach is the best way to go. Watch the recording of Adyen’s webinar here: The Future of Retail: Securing Every Dollar in a World of Unified Commerce

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