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Finextra
7 days ago
- Business
- Finextra
How to Increase Transaction Success Rates for Online Merchants: By Jurijs Bordulans
In online commerce, every successful transaction counts. When a payment fails — due to fraud checks, technical issues, or user error — it can result in lost revenue and a frustrated customer who may not return. For merchants, improving transaction success rates isn't just about fixing errors behind the scenes; it's about creating a smooth, reliable experience that keeps customers coming back. With global e-commerce sales projected to reach nearly $8 trillion by 2028 (eMarketer), merchants face losses of up to $448 billion annually from payment fraud, false declines, and abuse of returns and refunds — a growing challenge that impacts revenue and customer trust. Data from the Baymard Institute indicates that transaction success rates range from 56% to 84%, depending on the industry and setup. On average, about 70% of online shopping carts are abandoned, leaving only 30% of transactions completed successfully. In high-risk sectors like online gaming, approval rates are often lower, typically 50–60%, due to stringent fraud controls and higher chargeback risks. 1. Why Payments Fail Payment failures happen for all sorts of reasons — some financial, some technical, others tied to fraud checks or customer behaviour. Here are the most common ones: Insufficient Funds A simple one: the customer doesn't have enough money in their account. You can't control that, but you can offer other payment methods — like digital wallets or buy-now-pay-later — which might save the sale. A Kipp study found that 44.4% of online transaction declines are due to insufficient funds. This means that roughly a quarter to nearly half of all declined online transactions occur because the customer's card lacks sufficient funds. Card Declined by the Bank Issuing banks often decline transactions for reasons beyond insufficient funds. These can include suspected fraudulent activity, transactions in unusual locations or currencies, or bank policies that flag certain purchases as risky. Expired or Outdated Cards When customers use expired or replaced cards (due to loss, theft, or reissuance), the transaction fails if updated card information isn't provided. This issue is common with recurring payments and subscriptions. Payment Provider Issues Sometimes, the root cause of a failed transaction is technical difficulties on the payment provider's side. This can include system outages, slow response times, or errors in the integration between the merchant's platform and the payment processor, which can disrupt valid payments. Authentication Problems Security protocols such as 3D Secure require customers to complete additional verification steps during checkout. If these steps fail to load properly, are confusing, or the customer abandons them, the transaction will be declined or left incomplete. Overly Aggressive Fraud Filters Fraud detection systems designed to protect merchants can sometimes be too strict, resulting in legitimate transactions being flagged and declined. This often affects new customers, unusual purchasing patterns, or transactions from less common regions, leading to false positives. Technical or Checkout Issues Problems within the merchant's checkout process — such as broken buttons, missing required fields, incorrect currency settings, or lack of browser compatibility — can prevent customers from completing payments. These technical issues are often overlooked but can impact conversion rates. Below are five essential strategies to help reduce payment failures and improve your overall transaction success rate. 2. Optimise Your Payment Gateway Setup Your payment gateway does more than process cards — it can make or break your transaction success rate. Ensure you're using a gateway that suits your business, supports the countries you sell to, integrates smoothly with your checkout flow, and allows sufficient control to adjust settings as needed. Rely on Multiple Acquirers Relying on a single acquirer puts all your eggs in one basket. Using multiple acquirers lets merchants route transactions smarter — for example, sending European cards to a European bank. If one route fails, another can take over. A study by ACI Worldwide and Edgar, Dunn & Company found that 85% of merchants with multiple acquirer relationships saw increased conversion rates, with 23% reporting a rise of over 10%. Failover Systems If the main payment provider is down or slow, your setup should automatically switch to a backup without disrupting the customer. This keeps transactions flowing during outages. Retries for Soft Declines Soft declines occur due to temporary issues, such as network glitches or card spending limits. Retrying the transaction after a few seconds can often turn a failed attempt into a success, recovering sales that might be lost. Smart Retries Use data to determine the best time to retry failed payments, especially those declined for insufficient funds. For recurring billing, this can reduce payment failures by up to 30% through optimised retry timing and intelligent dunning strategies. A well-configured gateway setup helps recover failed payments before the customer notices an issue. 3. Improve the Checkout Experience for Better Success Rates Creating a seamless and user-friendly checkout experience is key to turning visitors into paying customers. According to Baymard, over 70% of mobile shoppers abandon their carts, often due to complicated or slow checkout flows. Improving the experience and functionality of your payment process can significantly reduce cart abandonment and increase successful transactions. Here are some essential elements to focus on: Clear Checkout Flow Make the payment process simple and straightforward. Break it down into easy steps, avoid asking for unnecessary information, and clearly show customers where they are and what to do next. This helps reduce confusion and lowers the chance of people abandoning their carts. Real-Time Card Validation Make sure your checkout system checks the card details as customers enter them. This means errors, such as incorrect numbers or expired dates, are flagged immediately so buyers can correct them on the spot. Setting up real-time validation reduces failed transactions from simple mistakes and helps smooth the payment process. Multiple Payment Options Not everyone wants to pay the same way. Offer a variety of payment methods like credit and debit cards, popular digital wallets, local payment methods, and buy-now-pay-later options. The more choices you provide, the easier it is for customers to find a method that works. According to the Digital Economy Payments report by PYMNTS, 15% of consumers use at least three or more payment methods, with at least two being non-traditional methods, such as digital wallets, cryptocurrency, or buy-now-pay-later (BNPL). Mobile Optimisation Many shoppers use their phones, so your checkout must work smoothly on all devices. Make sure buttons are easy to tap, pages load quickly, and the layout adapts well to smaller screens. A mobile-friendly checkout keeps customers engaged throughout the purchase process. 4. Leverage Smart Transaction Routing One of the most effective ways to boost approval rates is smart transaction routing, which directs each payment through the path most likely to succeed. Instead of sending every transaction through a single acquirer or processor, merchants can route payments dynamically based on factors like card type (debit vs. credit), issuing bank, customer location, or the historical performance of a route. For instance, if an acquirer often declines cards from a specific country, the system can reroute those transactions elsewhere. Modern payment orchestration platforms and advanced Payment Service Providers (PSPs) offer tools to support this logic. Many PSPs use AI and machine learning to monitor performance data in real-time, identifying which factors lead to success or failure and adjusting routing rules accordingly. This allows routing strategies to improve over time without manual intervention. For high-volume or international merchants, this setup can significantly reduce declines caused by mismatches between issuer expectations and processor behaviour. Smart payment routing can increase approval rates by 10–15% on average. Solutions like Adaptive Acceptance leverage machine learning to optimise transaction submissions to issuers, refining message formatting and routing paths. This can recover up to 10% of falsely declined payments, unlocking billions in potential revenue for merchants. 5. Reduce False Declines with Better Fraud Prevention False declines — when legitimate transactions are mistakenly blocked — are a growing issue for online merchants. They not only cost sales but also erode customer trust. Balancing fraud prevention with high approval rates is critical. False declines are a costly problem, with global losses reaching $443 billion annually, far surpassing actual fraud losses. In fact, 62% of online merchants report rising false decline rates over the past two years, underscoring the need for smarter fraud prevention and approval optimisation strategies. To reduce false declines while protecting against fraud, merchants should adopt a tailored, intelligent approach. Here are three key ways: Customise Fraud Rules to Fit Your Business Model Generic fraud rules may suit broad scenarios, but often fail to reflect your specific customer base. By tailoring fraud logic to your product type, transaction patterns, and user behaviour, you can filter out real threats without blocking legitimate activity. This fine-tuning is vital for industries like digital goods, travel, or subscriptions, where standard spending patterns may not apply. Use Machine Learning–Driven Fraud Solutions Unlike rigid, rule-based systems, modern fraud prevention tools powered by machine learning adapt to evolving customer behaviour. These systems analyse thousands of variables in real-time, making smarter decisions. Over time, they become more accurate at distinguishing legitimate from fraudulent transactions, significantly reducing false positives while securing your store. Use 3D Secure 2.0 (3DS2) for Smarter Authentication 3D Secure 2.0, an updated payment authentication standard, supports compliance with regulations like PSD2 in Europe. When used effectively, 3DS2 reduces false declines through risk-based authentication, allowing low-risk transactions to proceed without extra steps while flagging suspicious ones for verification. This balances strong security with minimal friction, especially for mobile shoppers, who often abandon purchases if the process feels cumbersome. 6. Work Closely with Payment Partners to Improve Success Rates Your PSP and acquirer are more than vendors — they're key partners in transaction success. Working closely with them helps identify hidden issues and implement targeted improvements to boost approval rates. To foster strategic collaboration with payment partners and enhance approval rates, adopt a proactive approach. Here are three tips: Conduct Regular, In-Depth Performance Reviews Go beyond surface metrics by analysing approval rates by region, issuer, and payment method. Work with your PSP to access detailed transaction data and pinpoint issues affecting success rates. Gain a Clear Understanding of Decline Reasons Issuer decline codes are often vague. Collaborate with your PSP to gain context and identify patterns behind declines. This insight is crucial for addressing root causes and improving authorisation outcomes. Collaborate on Routing and Optimisation Strategies Use advanced PSP tools like intelligent routing, retry logic, and dynamic risk scoring. Ensure these are tailored to your business needs through ongoing optimisation with your payment partners. A proactive, collaborative relationship with your payment partners can drive measurable gains in revenue and customer satisfaction. Conclusion Improving transaction success rates isn't about one big fix — it's about optimising every step, from checkout to fraud screening to backend routing. By understanding payment failures, refining your gateway setup, ensuring a seamless user experience, and leveraging smarter tools and partnerships, merchants can recover lost revenue and retain customers.
Zawya
02-07-2025
- Business
- Zawya
Win the e-commerce race: How convenience is becoming the new benchmark?
As more consumers choose to shop at digital stores rather than physical ones, the customer is no longer just king of e-commerce; they're in the driver's seat, demanding speed, clarity, and ease at every turn of the sales journey. And if they don't get their way, they simply click away, forget about you, and move on. The 2025 FedEx E-Commerce Trends Report revealed that a staggering 97% of consumers in the US have abandoned an online purchase because the process wasn't convenient enough. Whether it's a clunky checkout page, a lack of payment options, or uncertain delivery times, inconvenience has become the number one dealbreaker in today's digital economy. And it seems that South African consumers are not so different to their US counterparts. According to research by the Baymard Institute on Statistica, cart abandonment rates have been on a steady rise since 2014, following a peak in 2013. By 2023, the percentage of online shopping carts left behind hit 70% - the highest level recorded since that 2013 high. The natural evolution of e-commerce expectations E-commerce has transformed from a novel alternative into a baseline expectation. Post-pandemic shopping habits are here to stay, but so is a sharpened demand for seamless experiences. Consumers now expect what was once considered luxury as a bare minimum — e.g. free shipping, fast delivery, and real-time tracking. Shopify shows us that shoppers are more likely to shop from platforms that offer clear return policies and localised support, underscoring the need for businesses to communicate trust clearly at every stage. But it doesn't end at the checkout page. After they hit 'buy', Salesforce reports that 90% of shoppers said the post-purchase experience determines whether they'll come back. If you think people are willing to pay more for a better overall experience (and that is likely the case), success in e-commerce hinges on more than just the sale – it's about delivering a seamless, end-to-end customer journey. For small and medium-sized enterprises (SMEs), this is no longer optional – it's a competitive imperative. A smarter checkout for savvier customers Consumers are now accustomed to one-click checkouts, saved preferences, and instant payment confirmation. Anything less introduces friction, which generally leads to abandonment. With the rise of Buy Now, Pay Later (BNPL) options and digital wallets, businesses have no choice but to ensure payment choices are as intuitive as the shopping journey itself. Transparency is key: if delivery fees or customs charges appear too late in the process, trust disappears, and so does the customer. Increasingly, shoppers also expect curated experiences tailored to their behaviour. AI-powered personalisation — from product suggestions to customised offers — can help businesses reduce friction, improve conversions, and build stronger connections. Shopping in the scroll economy Another major shift highlighted in the FedEx report is the fact that 81% of global consumers are already using 'shop while you watch' or social shopping features. Picture this: someone is watching a TikTok skincare tutorial, sees a product they like, taps a button, and buys it without ever leaving the app. That's the scroll economy in action. For businesses, this presents both a challenge and an opportunity. It's no longer enough to build a website and call it a day. Today's shoppers expect the entire path to purchase to be seamlessly integrated into their digital lives — whether they're watching Instagram Reels, livestreaming, or reading a blog. That means mobile-first design, instant buy buttons, dynamic recommendations, and frictionless transitions from inspiration to checkout. Convenience here is not just a feature; it's the foundation. Powering the experience behind the scenes SMEs often play the multitalented role of marketer, merchandiser, fulfilment manager, and customer support — and they do it all at once. That's why logistics partners need to do more than just deliver parcels, they must help build the infrastructure for e-commerce success. And that means all the way from fulfilment centres to last-mile delivery, returns management, and even digital consultancy. Through tailored solutions like real-time delivery updates, flexible shipping options, and predictive tools, the right logistics partner helps businesses create the kind of seamless, end-to-end experience that customers remember, and most importantly, come back to. For South African SMEs navigating the complexity of online retail, leveraging such solutions is not just helpful – it's critical. Consumers are more likely to support businesses that provide reliable delivery and hassle-free returns. Convenience is no longer a nice-to-have. It's the currency of loyalty. In a landscape where one bad click can cost a sale, the brands that win will be those that make shopping feel effortless, personalised, and fast. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Forbes
20-06-2025
- Business
- Forbes
How AI Is Reviving Customer Trust In E‑Commerce
As shoppers demand speed, clarity and confidence, AI-powered infrastructure is helping brands reduce ... More friction and rebuild trust — one checkout at a time. When generative AI exploded into public view just over two years ago, few industries embraced it faster than e-commerce. From customer support chatbots to automated fulfillment tools, retailers rushed to integrate AI anywhere it could speed up decisions or reduce friction. And it's easy to see why. In today's crowded online marketplace, trust doesn't come from flashy chatbots or even catchy marketing. It's earned when a customer clicks 'buy' and then receives exactly what they were promised — on time, intact and without confusing emails or hidden fees. When that promise is kept, trust grows. When it's broken, everything can change overnight. In fact, according to data from global research firm Baymard Institute, nearly 70% of online shoppers abandon their carts before completing a purchase, often because of slow checkouts, surprise shipping costs, or technical glitches. That means three out of every five buyers leave right when brands are closest to sealing the deal. But now, a host of AI-powered infrastructure tools — largely invisible to customers — are helping to eliminate customer distrust. In dropshipping, it's one thing to list trending products, but inventory mishaps or pricing mistakes can ruin a customer's experience. That's where AI engines like those used by dropshipping platform company Autods come in. They monitor supplier stock in real time, recommend hot products before others jump in and even generate UGC-style product videos to help sellers promote items, all without costly video shoots. Perhaps most critical are the built‑in guardrails to pause listings when data seems off. As Lior Pozin, CEO of Autods and recent Forbes 30 under 30 honoree, told me, 'automation without fallback logic, alert systems and customizable guardrails is a disaster waiting to happen.' With such guardrails in place, Pozin explained sellers only offer what's actually available, avoid mispriced items and sidestep poor reviews caused by avoidable shipping delays. Lior Pozin, Autods CEO While platforms like Autods aim to reduce risk before the sale ever happens, the exact moment of purchase — where a slow payment field, or payment integration issue, or even a broken coupon code can make a shopper leave the checkout page even if everything was working perfectly until they got there — presents another challenge. For instance, the report by Baymard Institute estimated that 48% of shoppers abandon carts when shipping costs are added late in the process. Enter companies like checkout optimization platform provider PrettyDamnQuick, which use real‑time signals, including cart total, shopper location and past behavior, to dynamically adjust shipping options, upsells and delivery promises. PrettyDamnQuick's CEO, Avi Moskowitz, explained that 'the moment of purchase is where trust is either cemented or lost,' adding that 'every glitch avoided is a sale saved and, over time, builds confidence.' He noted that the company's clients report higher average order value and reduced churn, proving the point that protecting checkout infrastructure actually boosts revenue. Even when the checkout succeeds, fulfillment introduces its own risks and often, frustrations. Free shipping has become a baseline expectation: 80% of consumers look for it, and 66% expect it on every order, according to Baymard Institute's cart abandonment rate statistics. The stats also further showed that nearly half abandon their cart if extra delivery costs appear at checkout. And even free shipping only works if it arrives when it's supposed to. As a report by McKinsey revealed, most consumers are willing to wait four to seven days for free shipping, as long as it's reliable. If deliveries duck out of promised windows, dissatisfaction, purchase returns and refund requests often follow. That's where AI logistics tools like Shipium come into play. The company optimizes delivery routes, warehouse assignment and carrier choices — all in service of on-time, low-cost fulfillment. The payoff is fewer late deliveries, more predictable costs, and, most importantly, happier repeat customers. Baymard Institute estimates $260 billion in lost orders across the U.S. and EU could be recovered by improving checkout flows alone. Free shipping — even with slightly slower delivery — can push cart completion rates and boost average order values by more than 10%. And it's in areas like this that automation and AI can decisively turn things around. As Moskowitz noted, AI and automation are becoming essential allies for teams facing the chaos of modern digital retail. 'Today's environments are too complex and too fast-moving for manual rule-setting or reactive troubleshooting,' he told me. 'But with AI,' he continued, 'we can dynamically segment shoppers, personalize the checkout in real time and test dozens of hypotheses simultaneously, all without bogging down dev resources. That means less reliance on hard-coded logic and more adaptability to what's actually working.' However, Pozin cautioned that automation can go too far, creating risk rather than value for users. This, he said, often happens especially early on, when some sellers blindly automate everything without understanding how it works — a sentiment that Moskowitz also agrees with. 'Automation handles scale and speed — humans bring the strategy. That's the balance,' Pozin noted. The truth, according to these ecommerce experts, is that customers don't care whether you use AI or not. They care about whether you can deliver on your promise. And if you're able to use AI to do that more effectively, then they'll feel it when everything works. If you're a retailer thinking about AI, the advice from Moskowitz is that you shouldn't start with chatbots or fancy front-ends. Start by asking: Do we catch inventory or pricing errors before they go live? Does our checkout experience crash-proof your sale? Can we guarantee delivery within promised windows, whether cheap or free? If the answer is no, that's where your ROI truly lives; in reliability and simplicity that actually make trust stick. The point isn't blind automation. It's building systems so dependable, the customer barely notices until something goes wrong. 'When you automate — but add guardrails, monitoring and adaptability — you do more than save time. You build a brand that delivers, every time. And in the end, trust is what turns one-time buyers into lifelong customers,' said Pozin.
Associated Press
27-01-2025
- Business
- Associated Press
MojoAuth Unveils AI-Powered Adaptive Authentication to Thrust B2C Brands Ahead of Cybercriminals
First passwordless solution combining AI-driven adaptive authentication and behavioral biometrics to combat AI-generated phishing and credential-stuffing attacks. Palo Alto, CA - Jan 27, 2025 - MojoAuth, a pioneer in passwordless authentication solutions, today announced the launch of its groundbreaking AI-Powered Adaptive Authentication, designed to empower B2C brands to outpace evolving cyber threats while delivering frictionless user experiences. As AI-driven attacks surge, MojoAuth's innovation leverages machine learning and behavioral biometrics to dynamically neutralize risks like deepfake social engineering and credential stuffing—without sacrificing customer convenience. AI vs. AI: Fighting Fire with Fire MojoAuth's solution analyzes real-time risk factors—including user behavior, device patterns, and location—to adjust security measures on the fly. For low-risk scenarios (e.g., returning users on trusted devices), it enables 'invisible authentication' for seamless logins. For high-risk actions like large transactions, it triggers step-up verification via biometrics or magic links. This adaptive approach counters polymorphic malware and AI-generated phishing campaigns, which have risen by 135% in 2024 alone. Consumer-Centric Innovation Drives Results Early adopters, including premium retailers and streaming platforms, report a 92% reduction in authentication-related support tickets and a 47% increase in customer satisfaction. 'Traditional passwords frustrate users and leave brands vulnerable,' said Dev Kumar, CEO of MojoAuth. 'Our AI doesn't just block threats—it learns from them, creating a security system that evolves faster than cybercriminals can adapt.' Trend Alignment: Passwordless Goes Mainstream The launch aligns with the 2025 RSA ID IQ Report, which found that 61% of organizations now prioritize passwordless authentication. As regulatory pressure grows and consumer demand for seamless experiences intensifies, MojoAuth's no-code integration and quantum-resistant passkeys position B2C brands to future-proof their security stacks. Why It Matters - 81% of data breaches involve stolen or weak passwords (Verizon DBIR 2025). - 60% of consumers abandon purchases due to login friction (Baymard Institute). - AI-powered cyberattacks cost businesses $12.8B globally in 2025 (Cybersecurity Ventures). 'AI is the new battleground for cybersecurity,' added Dev Kumar. 'With MojoAuth, brands no longer have to choose between safety and simplicity—they get both.' Learn More Explore MojoAuth's AI-Powered Adaptive Authentication at [ or contact [ [email protected] ](mailto: [email protected]) for case studies and interviews. MojoAuth is a leader in passwordless authentication solutions, trusted by global brands to secure over 48 million digital identities. Its AI-driven platform combines behavioral biometrics, adaptive workflows, and zero-trust principles to eliminate friction and fraud. Media Contact Company Name: MojoAuth Email: Send Email Address:3101 Park Blvd State: CA Country: United States
