Title: Common Mistakes in E-commerce Checkout that Can Harm Your Business’ Bottom Line
Introduction:
E-commerce experts emphasize that avoiding certain checkout mistakes is crucial for businesses to protect their bottom line. While many companies prioritize enhancing the front-end checkout experience, they often overlook the backend processes that customers don’t see but greatly impact their experience and loyalty. Neglecting the backend can lead to challenges such as error-prone checkout processes, compromised shopper data, and damaging a company’s reputation. To address these issues, business leaders need to invest in improving their backend operations, especially during a time when economic uncertainties are affecting customer spending habits.
1. Insufficient Data Protection:
Consumer data security is paramount, considering the increasing prevalence of data breaches in the digital economy. Failure to keep consumer data safe can result in substantial financial losses and irreparable damage to a brand’s reputation. To alleviate concerns, enterprises can securely store shoppers’ card information in a protected digital vault. Implementing this safeguard enables businesses to securely store payment details for future transactions, allowing features like one-click checkouts and subscriptions while ensuring data protection.
To further enhance data security, businesses can adopt network tokenization, replacing sensitive payment information with tokens during checkout. These tokens, merchant-specific with one-time-use cryptograms, render the data useless to potential fraudsters if compromised. Embedding network tokenization in the enterprise payment system minimizes the risk of inaccurate data, false declines, and the possibility of valid transactions being flagged as fraudulent.
2. False Declines:
False declines can significantly impact a business’s revenue as buyers often abandon purchases after encountering them. In fact, e-commerce merchants reportedly lost an estimated $11.1 billion to false declines in the previous year. Achieving the right balance between security and payment approvals is crucial to prevent excessively low authorization rates. Backend payment technology, including predictive analytics solutions utilizing AI, can analyze transaction risks accurately. By distinguishing between legitimate and fraudulent transactions, these machine learning models reduce false declines, and the effectiveness relies on utilizing dynamic datasets.
Naked Wines, for example, witnessed a 5% increase in approvals after implementing PayPal Braintree and Fraud Protection Advanced. PayPal Braintree enhances authorization rates globally by approximately four percentage points by deploying risk assessment AI models that evaluate various factors such as geography, transaction history, and device data, empowering merchants to exercise more control over fraud reduction.
3. Combatting Fraud:
Economic uncertainty often leads to an upsurge in fraudulent activity, posing additional challenges for enterprise merchants. Recognizing this, companies are increasingly investing in technology to protect themselves against fraudulent threats. Payment tools play a crucial role in driving good customers to merchants while simultaneously preventing fraudulent transactions.
Payment tools help drive good customers to merchants and make it easy to make purchases. But these solutions also work on the opposite end — helping to prevent fraudulent transactions from the get-go, explains Cindy Turner, Vice President at PayPal Braintree.
4. Addressing Chargebacks:
Chargebacks represent another hurdle faced by companies post-checkout and can result in the loss of potential customers and significant financial burdens. Businesses typically incur chargeback fees and other operational costs, costing them approximately $3.75 for every $1.00 in chargebacks. Implementing chargeback protection software enables companies to screen for fraudulent charges during incoming transactions while safeguarding against financial losses during eligible disputes.
PayPal Braintree, for instance, offers protection against fraudulent chargebacks by storing purchasing data and facilitating comprehensive transaction information gathering. This allows businesses to verify whether requesting customers making chargebacks actually conducted the transactions or not, thereby protecting enterprises from unwarranted losses.
Conclusion:
To optimize the purchasing experience and ultimately drive successful business outcomes, it is vital for enterprises to prioritize backend processes, including data protection, reducing false declines, combating fraud, and addressing chargebacks. Neglecting these crucial aspects can lead to revenue loss, reputational damage, and missed opportunities for growth. By investing in backend improvements, businesses can ensure a seamless checkout experience, foster customer loyalty, and maximize their bottom line.
