As part of Payment Expert’s Expert Interview series, Editor Joe Streeter interviewed Aaron Begner, GM, EMEA at Forter on why an effective fraud strategy is so pivotal for merchants as they maximise engagement and ensure they aren’t turning away genuine customers.
What is it?
The session discusses how the evolution of e-commerce has accelerated in the past year during the digital revolution and looks at Forter’s NUMO concept which elevates the way merchants combat fraud, whilst also ensuring that users maintain the most efficiency within their customer journey.
Who is it?
Aaron Begner, GM, EMEA, Forter
Joe Streeter, Editor, Payment Expert
What is being said?
Begner talking about NUMO (New User Missed Opportunity) : “it really focuses on something called false positives for new customers to your site. So, the false positive is fundamentally a lost legitimate transaction, that stems from a decline that a company makes because they can’t get comfortable with who’s making the transaction – they fear the risk. And what we know is that the cost of that kind of decline is up to 75 times the cost of actual fraud itself. So tackling the false-positive challenge is a must for organisations.
“Where new users are concerned specifically, it’s vital because for organisations to grow, they need to develop their customer base and create lifetime value. They need to recover the costs of acquiring customers that they invest in at the beginning, and this is done by converting transactions at a very high rate and the concept of NUMO and ‘new user missed opportunity’, and from the report that we’ve developed the data shows false positive chat that the false-positive challenge is far more acute with first-time buyers.
“So, a first-time buyer is five to seven times more likely to get declined. And in 40% of those cases, unlikely to return. And this is a cost, both to the organisation’s themselves in single transactions but then also in lifetime value and it’s a cost that is a cost to the market, hundreds of millions of euros of revenue. So that’s the concept of NUMO and the pain point that we’re trying to raise in the market.
“There are a couple of considerations in association with NUMO. There’s the merchant view as, as the company sees the challenge of NUMO. And then there’s the customer view. And so if you imagine as a merchant, the challenge of NUMO is that new users are much harder to identify for a merchant so they represent a much riskier customer base.
“When you think about the gaps they have, there’s a lack of data, if I’ve never seen someone before, I don’t know who they are. I don’t necessarily know their behaviour as a merchant if all I’m looking at is my network of data, then I have limited access to personas.”
Why should I watch it?
To learn more about the evolution of e-commerce and its impact on the threat of fraud.
Where can I see more?
Source: SBC YouTube Channel