67% of online merchants believe that undetected fraud is costlier than declining legitimate transactions. Only 33% believe otherwise. As it turns out, false declines are a bigger profit leak for online merchants than fraud itself.
It’s estimated that businesses lose 3% of their revenue due to false declines. Between now and 2023 ecommerce revenue is projected to total $14.3 trillion. At a 3% loss rate, false declines will cost ecommerce merchants $429 billion, while fraud will cost the them $130 billion. In short, false declines will cost merchants 3x more than fraud itself.
The market for fraud-prevention solutions and technologies is teeming with options. The same thing can’t be said for false declines detection. False declines don’t show in your Profit & Loss (P&L) statement. Therefore, without the conscious effort to track false declines, the problem can grow into a full-blown profit leak.
Knowing where false declines happen within the payment chain is important to pinpoint where a solution needs to be implemented. False declines can happen at any of the following stages:
Chances are you have a false decline problem. The severity may vary, but it should be addressed nonetheless—both to reduce your current rate and to make sure that your cybersecurity initiatives don’t eat into your profits in the future.
Here are 5 ways you can start the process of reducing false declines:
Consider how your business could thrive if you were no longer constrained by the fear of fraud. If you're ready to begin reducing false declines and capturing more revenue, we're here to help. You can request a demo of our services here.
Vesta Corporation is a pioneer in processing fully guaranteed Card Not Present (CNP) payment transactions for e-commerce merchants. We offer scalable protection payment solutions and patented fraud protection services. We focus on protecting your revenue from chargebacks and fraud so you can focus on your company’s strategic growth.