Transaction Trends

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.

In an upcoming webinar on June 23, 2020, two experts from Ekata will discuss pre-authorization risk assessment, ecommerce and the new landscape of payments. The presenters are:

• Doug Fenning, Payment Risk Solutions Manager, Ekata
• Alvaro Peon-Sanchez, Director of Product Management, Ekata

In advance of the webinar, Transaction Trends talked to Fenning and Peon-Sanchez to get their insights into the webinar’s content and value.

TT: What impact do low CNP authorization rates have on ecommerce?
Ekata: Low authorization rates have profound effects on the payments ecosystem, and merchants are no exception. False issuer declines are commonplace in Card Not Present (CNP) payments, and this leads to a direct loss of merchant revenue and business operations such as inventory management.

The secondary impact of these declines is perhaps more extreme, causing a lack of buyer confidence in the merchant as they do not know or understand the declines are not in the merchant’s control.

Merchants and Acquirer Processors need to act before the authorization request to increase conversation rates and build trust.

TT: Why is it important for payments professionals to consider new approaches to boosting CNP authorization rates?
Ekata: The trust merchants develop in the ecosystem has a direct line to the way both PSPs and issuers handle their transactions. High levels of trust lead to optimized payments flows and better authorization rates, while a lack of trust leads to customer friction and false transaction declines.

PSPs are finding creative ways to optimize issuer transaction signals so that authorization is less likely to encounter technical issues. Likewise, merchants and PSPs are building methods for transaction risk analysis before authorization to increase the level of trust an issuer has in their transaction modeling.

The result of these innovative techniques is greater confidence in the merchant’s operational practices, leading issuers to adjust their authorization thresholds and cause fewer false declines.

TT: What can webinar attendees expect to learn from this presentation?

Ekata: By attending this session, attendees will better understand pre-authorization transaction processes. Attendees will also understand the challenges of increasing authorization, primarily burdened by the complexities of divergent systems and what techniques can merchants and processors use to address false issuer declines. Finally, attendees will learn how fraud risk plays into the management of the issuer declines. Ekata will discuss these core areas and demonstrate the value of identity data in the process.

Click here to register. ETA members can register at no cost.