Fraud Management and False Declines in eCommerce

This technical report examines the impact of false declines on profitability within the eCommerce sector, highlighting the findings from a survey of 300 executives from firms generating over $100 million in annual revenue. The report indicates that 11% of eCommerce transactions failed in the past year, leading to an estimated loss of $308 billion in the global retail industry due to false declines. It details the importance of effective screening mechanisms to identify fraud and typos, with only 33% of online retailers utilizing such solutions. The collaboration with payment service providers (PSPs) is emphasized as a significant factor in enhancing profitability, with 86% of firms reporting improved profits due to proactive support from PSPs. The report also notes that nearly all eCommerce firms are innovating their anti-fraud tools, yet only 16% see profitability as a benefit of these innovations. The findings underscore the necessity for eCommerce businesses to address both fraud and false declines to maximize their profitability.