The New Landscape of Payments: The Merits of Pre-Authorization Risk Assessment

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Card-Not-Present (CNP) authorization rates impact nearly every participant in the payment ecosystem. Legitimate customers suffer and lose trust in the ecosystem when you falsely decline their transactions. Merchants lose the lifetime revenue of customers who churn and decide not to shop with them. Card issuers risk having their cards put in the bottom of the stack of credit cards. Payment processors could lose merchants if they are likely to get better authorization rates with other processors. Card networks risk losing out to credit card alternatives, including digital wallets.

We recommend several practical methods for improving authorization rates, emphasizing on the importance of using data for assessing risk before authorization. Several companies are utilizing these methods already and seeing the benefits.

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