Forter recently hosted our New York City Payment Roadshow at Nike’s House of Innovation. During the event, payment professionals networked, customized a pair of Nike sneakers, and heard insights from Laura Woop, Senior Director, Risk, Payments, Fraud, Credit at Tiffany & Co., on how she is building the foundation for a modern payment infrastructure.
Key Takeaways
Pre-Auth Risk Decisioning to Increase Conversions
Merchants aiming to boost conversion rates by improving issuer authorizations can benefit from shifting their risk assessment to pre-authorization or before obtaining issuer approval. Traditionally, most merchants have conducted risk assessments post-issuer approval to minimize transactions needing manual review. However, with more and more fraud assessments leveraging AI, more merchants are moving this decision earlier in the payment process. This approach enables merchants to send cleaner traffic to issuers, enhancing overall bank trust and improving authorization rates.
In addition, merchants can adopt a risk-based authentication strategy by implementing a pre-authorization risk assessment. This strategy allows merchants to consider the risk level when deciding which transactions require additional authentication. By adding supplementary authentication measures, more borderline-risky transactions can be approved.
Leveraging 3DS Intelligently
Many merchants still view a 3DS challenge as a barrier to conversion, assuming it necessitates authentication for every transaction. However, numerous opportunities exist to utilize 3DS without requiring a challenge, such as frictionless 3DS or when sharing data with issuers.
By understanding issuer preferences for 3DS and transaction risk, merchants can strategically employ 3DS to enhance conversions and manage chargeback liability effectively.
What’s Next? Leveraging More Data in Chargebacks
Looking ahead, merchants should focus on incorporating more of their initial risk-assessment data into the chargeback process. This approach will help curb first-party fraud and increase chargeback win rates as issuers start to build models and automation tools that use data points instead of leaning on teams of manual reviewers.
Importance of Cultivating Community and Support in Payments
With very little public-facing education about the payments and risk industry, most payment professionals learn on the job. To ensure your organization implements best practices and stays current with industry changes, leverage insights from trade associations like MRC or MAG, connect with like-minded brands and LinkedIn thought-leaders, and collaborate with industry vendors. These resources are invaluable for continuous learning and professional growth in the payments industry.
Delivering a modern payment infrastructure is no small task. By taking intentional steps along the journey, payment teams can focus more on strategy and less on daily operations – while delivering even more value to their business.
Want to be a part of the next Payments Roadshow? Join us in San Francisco and Chicago!
Jeff Hallenbeck currently serves as the Global Head of Payments for Forter, where he is focused on building unique payment products and partnerships on behalf of Forter customers with a goal of connecting the right data points with issuing banks to maximize approvals and eliminate fraud from the ecosystem.