Ecommerce merchants are putting all their efforts to protect their business from fraudulent payment processing. Often, eCommerce companies try too hard because of fear of fraud, which results in false declines. The latter is also called false positives and happens when a legitimate transaction is turned down.
False declines are turning into a greater threat than actual fraud. US eCommerce merchants were expected to lose $8.6 billion in false declines in 2016, according to Business Insider. Merchants were expected to prevent $6.5 billion in fraud, which is $2 billion less than false declines. So it becomes more challenging for merchants to successfully fight fraud.
It is vitally important for merchants to turn to a reliable payment processing company like emerchantbroker.com for safe and secure payment processing. EMB is voted the #1 high risk processor in the US and has an A+ rating with the Better Business Bureau (BBB). EMB is one of Inc 500’s Fastest Growing Companies of 2016 and is rated A by Card Payment Options. EMB offers the best chargeback protection and prevention programs in the industry.
False Declines During Holidays
During the holidays, merchants get more worried about fraud. According to a privately held company that provides SaaS fraud and chargeback prevention technology, eCommerce merchants were expected to have a 13% higher holiday revenue in 2016 that would reach $78 billion.
The company reported the average order was estimated to have 55% likelihood of being fraudulent as compared to the other months of the year 2016. The average order value increased throughout the season starting from Black Friday ($178.68) and Cyber Monday ($165.04) to New Year’s Eve ($191.02). The fraud rates were estimated to go down 74, 70 and 69% as compared to an average day during the other months of the year 2016.
Based on the analysis provided by the company, the loss of revenue because of declined orders brings about more problems than the actual fraud. As merchants don’t have much time during the holidays to deal with a larger volume of orders, the company noted merchants would be less accurate about fraud. It was predicted that 60% of declined orders were legitimate on an average day. During the holiday season, the number was estimated to be 80%.