Challenges for Ecommerce Payments
Online payments, and their challenges, are constantly evolving.
Ecommerce businesses are particularly affected by these challenges as their payments exist solely online. Because of the nature of online payments, many ecommerce businesses struggle with low authorization rates, expired payment information, fraud, payment gateway issues, and high cart abandonment rates. If you want to avoid these costly issues and reclaim lost revenue, this blog will walk you through proven solutions to overcome these challenges.
- Reclaim lost revenue from failed payments due to expired card information with account updater.
- Combat card-not-present fraud with a combination of tokenization, 3DS, and a comprehensive fraud prevention platform.
- Reduce cart abandonment by making the checkout process quick, uncomplicated, and secure.
Concerns About Fraud
Many customers are concerned about security when they buy online, and for good reason. According to Federal Trade Commission data, consumers reported losing close to $8.8 billion to fraud in 2022, an increase of 30% since 2021. Increasing security may be a more nuanced problem than other ecommerce issues, but we’ll make it simple by suggesting three security tools that we believe deliver the greatest return on effort.
Whether customers purchase from a computer or a mobile device, tokenization captures payment data at the moment of entry and swaps it for a non-sensitive token designed for use in internal systems. Because no cardholder data is stored in your internal systems, there’s no cardholder data for a hacker to steal, even in the case of a data breach. Additionally, when no systems touch cardholder data, PCI compliance audits become a breeze since compliance is only necessary for systems that come into contact with cardholder data. The TokenEx tokenization platform secures cardholder data for companies of all sizes. If you want to learn more about tokenization, we suggest reading this story about Xplor Technologies and their choice to use tokenization to minimize their risk.
3D Secure is a security standard that requires multifactor authentication in order to prevent fraud for online purchases. 3D Secure will verify the authenticity of online purchases by integrating additional layers of verification, like codes delivered via email or text. This additional layer of verification reduces numerous fraudulent transactions that use stolen credentials to make purchases. As an additional bonus, enabling 3D Secure shifts the liability of fraudulent chargebacks to the card issuer. The dual benefits of increased security and reduced chargeback fees makes 3D Secure an essential tool for every online merchant.
When you tokenize with TokenEx, TokenEx can send the necessary cardholder data to the fraud prevention provider of your choice so you can enable top-of-the-line fraud prevention without introducing PCI scope. For example, when you combine TokenEx Tokenization and Kount Fraud Prevention, TokenEx will capture card data directly on the checkout page and send it to Kount for world-class fraud evaluation without introducing PCI scope. Using these tools together will both increase the security of your cardholder data and reduce fraudulent online purchases.
Payment Processor Lock-In
Payment processors have their fair share of issues, and these issues can keep you from accepting payments. If you try to resolve these issues by adding or switching processors, you may be out of luck. Many processors will charge you heavy fees to access your payment tokens, holding your cardholder data hostage and preventing you from creating the solution that works best for you.
This exact scenario happened to Acima Credit, when their inconsistent processor wanted to charge them over $100,000 to move their data to a new processor. “That’s when we realized we needed to remove the handcuffs and find a partner who would allow us to vault independently and provide the ability for us to onboard new card processors instantaneously,” Acima Credit VP of Engineering Ryan Christensen explained in an interview with TokenEx.
Acima Credit solved this issue by using tokenization to unlock payment flexibility. Tokenization allowed Acima Credit to own their data, and as a result, they gained the ability to instantly transition their transaction volume to a new processor while negotiating better rates. If you’re interested in gaining the freedom to own your data and add or change payment processors as needed, you can learn more by reading about Acima Credit’s TokenEx experience here.
High Cart Abandonment Rates
High cart abandonment rates are often caused by multiple issues. Below we’ve outlined some of the top issues that may cause a customer to abandon their cart, and how to solve them.
- Customers may abandon their cart if there are additional surprise costs, like high shipping, taxes, or fees. Keep customers from abandoning their carts at this crucial step by removing surprise fees and communicating shipping costs beforehand.
- Customers may abandon their cart if the checkout process takes a long time. You can speed up your customer’s checkout experience by storing their payment data. When you store customer payment data, the customer doesn’t need to reenter their payment information every time they checkout. If you’re interested in storing payment data, without increasing PCI scope, consider using tokenization.
- Customers may abandon their carts if they have any security concerns about the payment process. Be sure to keep the payment process secure, and don’t shy away from communicating the efforts you take to keep your customer’s payment safe.
- Customers may abandon their cart if account creation is required to finish a payment. Keep account creation simple or offer guest options to keep customers moving through the payment process.
Expired Customer Payment Information
When a card expires, many customers won’t update their card information for online payments. This can lead to customer loss when payments fail due to expired information. If you want to reclaim lost revenue from expired card payments, there is a tool that can automatically update expired cards. Keep payment information up-to-date with an Account Updater solution.
Although there are many different payment challenges an ecommerce business may face, there are also many different tools designed to simplify and overcome these challenges. If you’re unsure where to start, we’d suggest learning more about tokenization since it’s a step towards unlocking many other ecommerce payment solutions. If you’d rather get an expert opinion, feel free to schedule a demo with one of our TokenEx payment experts. We’d love to chat about your individual payment use case and help you find the perfect tools to optimize your online payments.
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