One of the top concerns for merchants shipping goods is whether the address to where they are shipping is valid or not. If valid, is it currently receiving mail? And finally, but probably the most important item is whether the person/business whom they are shipping the good to even stays there. All in attempt to reduce fraud and chargebacks to the business. Address validation is one way to confirm if the transaction is legit. But certainly not enough. What if the address to where you are shipping is legit and the owner stays there – but is in fact a fraudster? Is it a case of a stolen credit card and thus the billing details were fraudulent? What if the transaction is coming from somewhere in Africa when the shipping address is in Kansas? Confirming that the order is not fraudulent requires a lot more than just address validation.
The other side of the spectrum is where merchants are rejecting transactions with suspicion of fraud. We see merchants who reject transactions just because the billing or the shipping address is outside US. Or because it is being sent to a freight forwarder. According to the Merchant Risk Council’s 2015 Global Fraud Survey, more than 10% of merchants report a customer insult rate in excess of 20%. In addition, 37% of merchants do not track false positives. While a single transaction decline may not present a substantial monetary loss, the risk of reduced customer lifetime value can be very substantial. For some industries, this cost can be upwards of 10x the transaction amount. Reducing the false positive rate and maintaining good customers will be main focuses for merchants as consumers continue to shift to online and mobile commerce.
One way to reduce customer insult rate as well as fraud and chargeback rate is to integrate the right identity data attributes into your decision engine within your layered process.Ekata Identity Check™ provides data around phone, name, physical address, email, and IP, allowing complete identity verification around five data points in one search. These data points can help provide positive and risk signals for transaction decisioning.