Innovative technology plays a huge role in the continued expansion of the ecommerce sector. In the UK alone, online retail sales are predicted to rise to £53.2bn in 2015, with ecommerce showing no signs of slowing down.
MasterCard and Visa remain the leading names in payments, yet more and more new technologies continue to joinroughly 200 different types of electronic-payment methods that already exist in the ecommerce arena. With such diverse, evolutionary technology, MasterCard and Visa’s reign in the payments world is in jeopardy.
Retailers want a seamless online offering in order to attract new customers and keep existing customers coming back. In recent years, shoppers have developed more sophisticated, digitally influenced buying habits and expect a seamless, end-to-end experience every time.
Although technology is undoubtedly important to a merchant’s customer offering, it is also crucial in the back-end to ensure that the merchant is secure and minimising the risk of fraud. At present, credit cards are the most popular global payment method in ecommerce and are often the payment method sitting behind eWallets. Credit cards prove excellent for recurring payments as they are guaranteed up front, and companies can keep pulling payments from that card with the customers’ agreement.
However, there are some downsides to this payment method, which arise in form of fraud and chargebacks. A recent study by LexisNexis showed a drastic rise in retail fraud as merchants lost 94% more revenue to fraud this year than in 2014.
If businesses do not use security technology it puts them at a higher risk of encountering issues with fraud. The increase in defrauded customers becomes a catalyst for a vicious cycle of events which ultimately costs the customer more in the long run. When customers are defrauded, they can go directly to the bank for a refund, or chargeback, rather than the retailer. This costs the merchant in fines and lost goods, which results in the merchant having to raise its prices in order to counteract the revenue lost through the chargeback.
This doesn’t have to be the case, as there are a number of tools techniques available to retailers looking to protect themselves from the rising chargeback threat by both preventing chargebacks in the first place, and successfully disputing them if they do occur.
