This post will guide a merchant through every avenue where a transaction is relevant, whether that be in the payment methods offered, where a consumer wishes to checkout, or months later after the revenue is settled. Transactional data is there to be leveraged by both the merchant and the customer. The key is in how merchants use it to retain both revenue and consumer loyalty for long-term growth.
When a customer makes a purchase the number of elements that can cause a purchase to be abandoned can happen before the customer even clicks ‘go to checkout’. Even after the fact, the threat to your bottom line has far from been averted.
Amongst a variety of elements not even looked at, site optimisation, checkout flow and fraud are all variables that occur at different stages of the customer journey; that can affect merchant revenue and customer retention. A term that encompasses both of these elements is ‘attrition’ which will come up later on, as we discuss how the overall effectiveness of a business is affected by e-commerce best practices.
Leveraging transactional data in its inbound journey for every completed and abandoned purchase, can give a very telling projection into both the future of e-commerce and the success of your processing; and how it can further be used in marketing campaigns.
One solution to upheave failing traditional marketing methods, lies in a suite of fraud tools whose use has only ever been seen as one-dimensional – until now.
Total Processing offers advice and solutions that target pain points and friction in processing and reconciliation. Our merchant account services and gateway solutions offer payment and integration support with oversight and management throughout every stage; taking industry-wide and sector-specific issues into account.
Our results are technically rich and tactically diverse, with an innovative offering of chargeback and fraud prevention strategies, alongside alternative payment method (APM) offerings that will - as we’ll explore - go a ways into streamlining site optimisations, sales conversions and payment standard compliance parameters, as well as offer in-depth marketing insight as a result.
When we look at how to structure marketing campaigns and solutions in order to increase conversions, traditional methods do not often look at product aftercare, nor the opportunity to utilise data from individual customer profiles in compiling these strategies.
Whilst promotional strategies are successful, there needs to be a way to reconcile data to increase the small percentage – 2.86% to be specific – of site visits that convert to a sale and mitigate pain points at the various trigger points of a sale.
A way to do this has long existed, and we can repurpose fraud and the way it had been used to mitigate and prevent it into a multi-purpose and omni-channel tool. To surmise, a ' good offence is the best defence’ and merchants can begin to target conversions whilst attacking fraud.
Cart Abandonment Rate
Let’s begin by looking at cart abandonment. Whilst purchases do complete, and later we’ll see that this isn’t the be-all and end-all, let’s focus on first getting products through the checkout successfully without friction, to increase consumer retention and loyalty.
Cart abandonment currently stands at 72.86%. Whilst this figure has come down slightly in recent years, it is much higher at mobile and at tablet devices. Due to a lack of APM offerings and optimisation, the friction created through checkouts on these smaller devices’ spikes cart abandonment rates to 85.65% and 80.4% respectively; asking us to consider how and why we’re marketing to consumers across all devices - taking every element into account.
If we look at these devices on a surface level and just take size into account, it’s obvious that compressing traditional checkout elements into smaller screens does not work and no amount of product promotion could save you. Simply, one size does not fit all - at the checkout or in traditional marketing.
In a newer approach to yielding higher conversions, merchants can be asked to consider whether multi-elemental checkouts are built to function on devices built to operate on slower data networks, with a demographic used to living within instantaneous one-click fulfilment systems.
Case studies conducted by Stripe demonstrated that e-commerce merchants who implemented Apple Pay at web or mobile saw conversions more than double – however, this figure less so when smaller businesses and sole trader services results were included in the study.
With the condensed elements of an Apple Pay APM - that shortened the checkout process from the average of 23 towards elements to the more ideal number of 12; as well as reducing the opportunity for human error; checkout speeds were ultimately 58% faster on average.
The same can be said for the implementation of Google Pay, which saw an increase of 7% to 55% in conversions in these same environments - as well as a 50% increase in checkout speeds.
Increased revenue from abandonment resolution also offers insight into how to pursue cross-channel marketing and device-specific advertising.
These kinds of APMs also have the potential to carry forward built-in loyalty legacies. Not only does having a top-ranking website load in 1.9 seconds on average, but a lower-ranking site will also load 17% slower and see a 50% deduction in loyalty and retention.
Optimising the checkout flow through increased APM offerings also extends itself to resolving friction that occurs in security compliance. The friction that accrues at this stage of the checkout often dissuades the most genuine and willing consumer - no matter the influence of your marketing campaign.
Currently, 1/3 of shoppers were declined at the checkout due to a false decline, this an instance where overzealous fraud parameters accumulate attrition and not retention for a merchant’s business – an example of the delicate balance required in leveraging the data of a transaction for long-term gain.
With the right APM, security compliance can be met in a way that reduces the number of do not honours and false declines (where valid card information is incorrectly rejected) that a merchant has to deal with, within the day to day of their business. So, whilst these methods prevent false declines, they’re also meeting payment standard parameters that aren’t so frictionless when acquired by other means. APMs such as Apple Pay and Google Pay, meet compliance standards through biometric ID, whereas 3D secure is notably known across some demographics for causing problems at the checkout.
Another way merchants can ease friction at the checkout is through the use of the integration of a PCI compliant hosted ‘COPY and PAY’ payment page, that securely uses tokenized data to checkout. This payment method enables ‘remember me’ preferences to save the customer time throughout their transaction.
Knowing Your Customer and Predicting Fraud
Our fraud prevention and mitigation data sets allow you to reduce attrition and increase conversions by freeing up revenue to redirect and conceptualize marketing campaigns, that maximise output without targeting the wrong consumer, to begin with.
The two most important objectives for any business to balance and overcome in yielding a profitable revenue, are fraud reduction and a conversion increase. Fraud is continuously costing merchants an upwards of $2.40 USD for every dollar in false positives and chargebacks. The threat to processing extends beyond a surmounting rise of refunds, arbitration, and wasted shipping costs, but rather exists in the threat to processing that begins with a fine or the inevitable rise in transaction fees from card schemes and processors every time a chargeback is filed and risk of doing business increases.
A merchant needn’t be wasting time on fighting fraud and failing to maximise on marketing potential, when the same tools can achieve both.
A report from First Data especially highlighted how customer behaviour and buying patterns, can be analysed and implemented into buying strategies to increase not only conversions, but more so retention.
The report focused on the hypothesis that marketing strategies were more successful when based on ‘active purchasing behaviour’ which they refer to as a ‘customer tempo’. This approach demonstrated the success of diverging from traditional marketing strategies - that typically work from limited captured data sets. When First Data’s revised strategies were implemented, their clients saw a decrease in attrition.
The mass market is more fragmented than we think, so we need to be able to target multiple markets whilst maintaining a cohesive brand message. Keeping pace with actual purchase behaviour allows marketers to redirect campaigns to specific behaviour. The key here is to use insights from transaction data over time, to measure the flow of behaviour and add this to the current demographics.
What our suite of tools achieves, is done by gathering information from every data point and assessing where and how it can be utilised.
Where a lot of services will often offer a one-size-fits-all approach to fraud - all together failing to offer a diverse approach to marketing in these avenues - this insight into how fraud tools and false declines can cause irreparable friction and highlight how different demographic elements are suited to different strategies; just like differing marketing campaigns.
Performed as a standard across the payments space are:
- AVS Checks
- CVV Checks
- Terminal Velocity Checks
A trio of tools we offer are as follows:
- Payment Velocity Checks: which follow the number of purchases coming from a specific origin
- IP Geolocation
- Set limits: Monetary limits can be applied to transactions.
None of these tools should be used in isolation and should be compared against other data to detect discrepancies.
Instead, all of this is used to identify promising areas of growth and enhance direct response rates to marketing campaigns to ultimately, improve customer retention. Company-specific transaction data is a proprietary asset to be used as an advantage in velocity checks and product affinity assessments; and determine whether the combination of this data determines a regular purchasing behaviour for the consumer.
This data will exist outside of regularly acquired data such as consumer demographics, a retention score and the RFM score (Recency, Frequency and Monetary Value). The combination of these two data sets can lead to campaigns with tailored messages, explain motives behind changes in consumer purchasing patterns, and give methods as to how to maximise individual response rates.
To expand on the study conducted by First Data, our Machine Learning tools apply a pattern of learning algorithms and analysis to perform predictive analysis on consumer spending; whilst determining whether a transaction is likely to be fraudulent using data that loads 8 minutes from real-time. This can be used with a plethora of consortium data to use merchant’s proprietary data with over 10 million fraud records within its historical data portfolio; to enhance a consumer analysis.
Tailored Rules can then be set from this data on how to proceed to trigger methods such as 3D authentication, or this analysis can be run silently to allow merchants to become aware of a likely chargeback with additional retrospective monitoring and cards that you choose not to take action on. Additionally, Total Processing can also offer an additional chargeback alerts system.
Should I Sell This, or Manage This? – A New Kind of Marketing
Fraud prevention is not just a method of saving on lost revenue, but it is quickly becoming a method of generating it. A rapidly upcoming trend asks for merchants to embrace fintech’s tactical assistance in 2020 as fraud and the more deceiving threat - chargebacks - become more prevalent as e-commerce becomes more popular.
With chargebacks occurring at 3 times the rate of the growth of transactions, and e-commerce expected to account for 17.5% of all retail by 2021, up 6% from 2018; there is reason to worry about false positives affecting your revenue months after a transaction has completed.
With our tools in place, merchants can track transaction data from these basic elements, to an extensive suite of fraud tools; as part of a marketing strategy that asks ‘should I be selling this, at all?’.
Marketing Going Forward.
All of our fraud services and payment solutions are offered through our payments gateway - which is connected to more than 300 banking partners - with the ability to host 198 payment methods, across 196 countries worldwide.
With borderless opportunities to maximise your e-commerce revenue, merchants can access a level of control that is truly tailored to them.
Whether it be through our bespoke Total Control systems or you take advantage of our infrastructure of payment engineers and customer success managers to manage your processing; we’ll be on hand 24/7 to assist.
Total Control can assist you with your processing, fraud and marketing solutions because we have the technology to do, as an all-in-one solution - with ease.
On data acquired from every transaction such as:
- Card Holder
- Merchant Transaction ID
- Transaction Amount
- Payment Brand
- Payment Type
- Do Not Honour specifications
Enquire today to learn more about our services.
Last year we discussed how to leverage Transactional Data in partnership with PushOn. See that below: