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Online retailers battling with fraud prevention are losing out on genuine sales by treating their customers like criminals, according to a new report by ThreatMetrix.
While the cost of online orders lost to fraud is said to be around £2.92 billion, ThreatMetrix says that retailers could be losing out on an ever greater sum by employing fraud protection services that can’t identify genuine customers. According to the report, titled ‘Are You Treating Your Customers Like Criminals’, authentication protocols and password prompts which cause basket abandonment could be as much as ten times more costly than fraud.
As Biz Report notes, the task of identifying genuine and loyal customers has become all the more difficult in the wake of rising mobile sales, with systems unable to identify customers across multiple devices. With over 30% of all transactions attributed to mobile and 40% of new customer accounts being created on smartphones and tablets, tracing and securing the customer’s device is tougher than ever.
“A new approach is needed to create a frictionless online customer experiences. Instead of pouring budget into manual checks to stop legitimate customers falling into fraud filters, retailers need to adopt a single platform that provides comprehensive context-based authentication and personal recognition,” says ThreatMetrix. “By treating people like people, businesses can provide real-time defense to minimize credit card fraud and account takeover risks, while keeping the customer experience hassle-free and protecting their account login.”
Author Kyle Ellison, ESET