As highlighted in our Australian Payments Fraud 2017 report, Australians’ use of cash and cheques is dropping as consumers continue to embrace digital payments.
In 2017, the independent non-profit organisation, E-commerce Foundation released a report on the state of e-commerce in Australia. Of the countries they reported on, Australia has the fastest growing B2C (business to consumer) eCommerce growth rate at 40%.
This shift to online purchases presents new challenges. Recent statistics indicate that card-not-present (online) fraud accounted for over 80% of all card fraud in July 2016 to June 2017.
So, with online payments increasing and online fraud also increasing, how do merchants continue to manage their fraud risk while still growing sales? There are three key methods available to merchants, depending on the risk profile of their business:
With more options in the market for merchants to manage their online payment risk than ever before, are merchants having a greater say in the way that consumers are purchasing their goods? Well in this writer’s personal opinion, absolutely – and it’s something we can expect to see more of. We can see this in the order of “buttons” presented on the checkout page. In some cases, merchants are offering a single button in the first instance of the checkout (i.e. their preferred payment option), with a secondary link below for other payment options, should the customer need greater payment choice.
Payment solutions now can capture consumer information up-front for a one-click checkout experience – where customer authentication, plus payment information, plus delivery address information, are seamlessly integrated into the checkout. This approach helps increase sales by simplifying the customer purchase experience while building fraud checks into the background of customer purchase.
The next evolution may see a greater level of automated purchases through consumer devices based on a combination of artificial intelligence, for purchasing and biometrics, for authorisation (such as voice, face and thumbprint). For example, once you have selected your preferred brand and provided authorisation to your fridge, your fridge could automatically order milk from the cheapest vendor to replace the one that has nearly run out.
We may also see the introduction of merchant discounts that purposefully reward “known” customers, i.e. where merchants have more confidence about who they are selling to. So with a 10% discount, that drone I’ve had my eye on for a while now becomes that little bit more attainable.
For more details on how industry is supporting merchants as Australians continue to embrace the convenience of cards, look out for our Australian Payments Fraud Report 2018 coming soon.