Forter, the trust platform for digital commerce has launched Smart Payments. The new solution is designed to increase digital commerce conversion rates and revenue. The offering optimises the use of 3D Secure (3DS) to meet Strong Customer Authentication (SCA) requirements. It also reduces friction in the payment process — Smart Payments executes 3DS only when additional validation is needed. Smart Payments simplifies compliance with government regulations including Payment Services Directive Two (PSD2) in the European Economic Area (EEA).
Digital commerce continues to grow rapidly, surpassing $8.7 trillion in transactions in 2021. Yet businesses may not be fully realising their revenue opportunity. Gaps in decisioning across the digital commerce funnel negatively impact conversion rates, and can leave revenue on the table. Poor user experience can also alienate legitimate customers whose transactions are falsely declined.
To mitigate the risk of fraud, merchants and regulatory agencies are pushing for Strong Customer Authentication (SCA). This requires consumers to provide pins or passwords, validate their identity via a device, a fingerprint or other means. These steps add friction to digital commerce and increase cart abandonment. Research by Forter indicates that 18% of US shoppers have abandoned a transaction because the process was too long and complex.
Forter Smart Payments
Forter Smart Payments applies the company’s Identity Graph and machine learning to make informed 3DS recommendations. Smart Payments can even execute the 3DS authentication if required by a business. The platform ensures that a transaction is routed for SCA only when necessary. Reducing friction for the vast majority of consumers and maintaining PSD2 compliance for merchants doing business in the EEA. In addition, Forter Smart Payments provides visibility into 3DS recommendations, failure and conversion rates and business impact.
The requirement for SCA is even more vital for businesses that are based in or transacting in the EEA. These businesses are subject to a specific regulation—PSD2—that requires SCA before a transaction can be completed. Forter’s PSD2 solution uses advanced technology to capitalise on exemptions, minimise the portion of transactions routed for authentication and maximize approval rates.
“We have successfully partnered with Forter for several years to reduce digital commerce fraud and abuse. When they showed us how they could also increase conversion rates while complying with PSD2, we moved forward,” said Sian Woods, Global Head of Security Operations & Fraud at ASOS. “The results were immediate. We can reclaim revenue that otherwise would have been lost to abandoned purchase processes. Smart Payments is a game-changer for our business.”
Reducing cart abandonment
When customers are presented with a 3DS challenge, they often abandon their purchase. The impact can be as serious as 24% abandonment in France.
Forter’s Smart Payments solution is able to identify relevant exemptions to minimise the portion of transactions sent for 3DS authentication. Depending on a merchant’s average order value, around 85% of transactions can be eligible for exemptions. Reducing the portion of transactions subject to this friction reduces overall cart abandonment.
“Forter is committed to driving business outcomes for our customers. Understanding that regulations like PSD2 were complicating their conversion process, we have brought new intelligence to 3DS authentication,” said Michael Reitblat, CEO of Forter. “Smart Payments replaces dated processes and ‘dumb’ 3DS applied to every transaction, with a solution that delivers a streamlined experience to the vast majority of consumers and more revenue for our customers.”
While 3DS execution is a commodity offered by most payment service providers. They usually either apply 3DS on all transactions, or apply 3DS using simple rules. While simple, this approach is highly counter-productive.
Smart Payments optimises conversion rates by applying intelligence to authentication, routing and recovery to reduce lost revenue by up to 80%. Businesses can also apply Forter’s unique intelligence to route transactions to processors to maximise approval rates. They can use Smart Payments to automatically recover a portion of lost transactions by resolving the declines of legitimate users.
Enterprise Times: What this means for businesses.
This should be good news for businesses that process the increasing array of payment types, particularly from around the globe. The new offering streamlines authentication and facilitates compliant transactions in the European Economic Area. What differentiates Forter from its competitors is its dataset. Forter is part of a global coalition of merchants fighting fraud together. The company ensures a good customer (or a fraudster) known to one merchant is known to all merchants.
The company process transactions globally across issuing banks, payment methods and other would-be data silos. As a result, competitors making decisions based on their own isolated dataset may lack the wider context. Intelligence that Forter can apply to these decisions in fractions of a second. Forter knows the identity behind each transaction and looks at their full journey and intent, not just the specific transaction. The company can make smart recommendations about when to apply 3DS to optimise acceptance rates. Furthermore, when to trust the consumer and apply for a relevant exemption.
