11th Aug, 2020
A recent report by Checkout.com has indicated that merchants lose “over $20 billion due to false declines”.
While $12.7 billion of this figure goes to another merchant when a customer is turned away, it must to be noticed that false declines “are also making for a less efficient digital economy”. This is because “$7.6 billion of potential spending never came about as the shopper lost interest.
In the same report, a senior industry executive pointed out that re-visiting risk appetite is vital. Also, a “lot of sins can be hidden in the name of #fraud prevention, because fraud teams aren’t always incentivised to have a very rigorous statistical measure of false positives and false negatives”.
“Many companies just don’t want to get on the MasterCard and Visa chargeback programmes, and that’s the guiding principle. But I think where the real value lies is in getting more intelligent about where you set those lines and being very honest with yourself and very rigorous about what your risk appetite is, and knowing what your actual false positive and false negative rates are when it comes to fraud,” Andrew Row, Managing Director of Uber Payments has been quoted as saying in the report.
Travel ecommerce players are focused on garnering bookings and not going to initially care where a booking is coming from. They also need to better handle the issue of falsedeclines — legitimate orders that get rejected on suspicion of fraud.
It is imperative for airlines and others to evaluate their own fraud model and points of verification and authentication of the payment process.
To curb revenue leakage, travel companies must evaluate distinct behavior and risk, for instance, on each device, rather than applying one set of rules. Ekata asserts that rather than “strictly looking at definitive good or bad, it would be more effective to look at the probability of good or bad, so to adjust to the right tolerance level in letting transactions through”.
In fraud riskmanagement, as PayPal also points, it is vital to source info from a variety of sources, incl. real-time info to check authenticity of transactions.
Priceline, in conjunction with Forter, chose to rely on automated decision-making throughout the entire payment flow to work out an apt routing for a transaction to be approved.
Airline Travel Payment Summit - ATPS Virtual Conference
20 - 21 Oct 2020
The ATPS Virtual, co-hosted with UATP, is dedicated to the payments and fraudprevention strategies needed for airlines and travel-related businesses to survive.