The Art Of Understanding Customer Fraud Protections

By Kathleen Peters

Many business owners reluctantly regard the loss of some honest customers as an unfortunate byproduct of the security protocols they have in place. And that’s because traditional methods of fraud detection, which generally rely on PINs, passwords and other measures that require a customer’s input, “flag” potentially inauthentic transactions based on those measures. While sometimes, the transaction is fraudulent, often a customer simply can’t remember or retrieve a PIN or password after several attempts, and the transaction is declined. Every time you decline a transaction based on suspicion alone, you’re risking the loss of a legitimate sale — and maybe even a long-term customer.

 Two businesspeople holding briefcases outdoors

Still, 67 percent of the businesses we polled believe that fraudulent transactions that aren’t declined are costlier than legitimate transactions that are declined. In fact, our global research found that a vast majority (71 percent) of businesses use fraud-prevention measures based on suspicion and detection (i.e., declining transactions based on raised red flags and potentially losing legitimate customers in the process), while only 29 percent use fraud-prevention measures based on permission and trust (approving more transactions based on faulty assessments, thereby inadvertently permitting fraudulent activity).

Source: entrepreneur.com

Sign up for Updates

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of new posts by email.