New Case Study: A U.S. Issuer’s Experience with Visa’s IDX Solution

New Case Study: Visa’s IDX Solution

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False Declines

Frustration and False Declines

False declines. For the ecommerce merchant, they can be a never-ending source of frustration. False declines represent good transactions (meaning would-have-been sales) that are declined due to suspicion of fraud. Simply put, they are valid transactions that are incorrectly rejected. Missing a good sale because of a false decline eats into profits. But here’s the bigger problem.

Think about a false decline from the buyer’s point of view. They probably spent some time researching their “problem,” or “need/want.” Whether it’s the perfect pair of wedge sandals or a new computer, it’s a similar process in most cases. The buyer invests time – looking at different sites, researching various products, reading customer reviews and comparing features. Finally, they decide on a purchase and – it’s declined.

Now what? Most likely, one of two things – or both – can happen when a legitimate consumer is declined. They can either select another card from their wallet, or they can take their business elsewhere and buy from another merchant. The merchant, the issuer, or both lose. And many times, once a consumer switches to another card or goes to another merchant, the chances of them returning to either can be slim. Not to mention the chance of getting a bad reputation if that consumer decides to share their negative experience through all their social networks. In the end, false declines result in lost sales, lead to consumer dissatisfaction, and reduce revenue for both merchants and card issuers.

According to the Aite Group’s study “The E-Commerce Conundrum: Balancing False Declines and Fraud Prevention,” July, 2019, it’s estimated that false declines will grow to $443 billion by 2021. Plain and simple, that’s a lot of lost revenue.

False decline impact projection graph

But for the merchant and issuer, it’s not easy either. Becoming a security expert and tracking down false declines is not what their focus should be. But there’s an answer. To help reduce false declines, it all starts with authentication. EMV® 3-D Secure provides merchants and issuers with an additional layer of security prior to authorization that helps reduce false declines and fraud and ultimately, increase approvals.

EMV 3-D Secure is the latest set of protocols that can authenticate Card-Not-Present transactions on any device,with limited checkout friction and reduces false declines with improved risk-based authentication. More than 130 data elements shared with the issuer help authenticate the identity of the cardholder, so issuers can authorize with greater confidence, and that’s the key. There’s ten times more data exchanged with EMV 3DS than the original 3DS 1.0. and every transaction has greater dimension and context. Because of all this data, using EMV 3DS can result in fast and secure authentication with fewer declined transactions, increased approvals, improved consumer trust and a better shopper experience. Right there – merchants, issuers and shoppers WIN, making digital commerce a happy place for everyone.

Want to feel better about your bottom line? Not all 3DS providers are created equal. Cardinal has been doing authentication as long as authentication has been around. Let’s talk.