Signifyd: Avoiding FOMO through Payments Orchestration

FinTech Magazine speaks to Amal Ahmed, Director of Financial Services & EMEA Marketing at Signifyd, about how the latest payments technology and orchestration is helping boost e-commerce to a steady rise, and how retailers can avoid FOMO by leveraging the latest technology. 

What is the relationship between retail and payments like today?

The connection between retail and payments has never been closer - or more important - than it is now. There’s been a lot of speculation around recessions and consumers limiting their spending, but projections show that e-commerce will continue on a steady rise at least through 2025. 

With that said consumers have become increasingly discerning and demanding following the pandemic. (Adobe found consumers spent US$1.7tn online from March 2020 to February 2022, $609bn more than the two years leading up to the pandemic.) That’s a sure sign we now expect to buy what we want, when we want it, wherever we are. 

Access to merchants ‘on-demand’ combined with consumers’ efforts to make their money go further because of inflation, means one thing: merchants can no longer rely on loyalty to drive sales. Whereas previously customer loyalty remained strong, we’re now seeing 6% of consumers opting to change brands they were previously loyal to save money. 

Because of these pressures, merchants cannot afford to leave money on the table. That’s where payments play a key role; merchants need to protect their bottom line - payment orchestration holds the key to unlocking pipelines and more closely connecting the multitude of players in the payments industry as a whole.

With the onset of PSD2 and Strong Customer Authentication regulations (SCA), merchants have to contend with balancing security and experience for customers, which hasn’t always been easy. 

How can retailers orchestrate payments while navigating regulations and maintaining a good user experience? 

One answer: partnerships with a provider who can reduce unnecessary friction, protect revenue, and absorb risk. While SCA has provided robust fraud protection, implementation has sometimes meant that retailers experience purchase abandonment (5% higher in Europe than globally). 

Correcting this while continuing to benefit from the protection SCA affords requires a keen focus on exemption management. Maximising the number of eligible orders that can be routed around SCA eliminates friction, improves customer experience, and increases conversion rate as according to recent research, 74% of customers make a purchase based on CX alone. 

While regulations like SCA have helped suppress online card fraud, they’ve placed pressure on the customer experience elsewhere and a shift in fraud to other touchpoints such as account takeover (ATO), return fraud, or delivery abuse. According to the ONS, online fraud is one of the few forms of fraud on the rise (up 25% since 2020 despite other forms of crime decreasing).

While SCA has inherently improved the security of online payments, it also means that multi-factor authentication has made shopping tricky for consumers, leading to reduced conversions and increased friction across the user journey. 

How can friction in payments be overcome? 

Analytics tools through payment orchestration providers are key here: helping merchants by providing the base infrastructure for them to better leverage data with insight. This in turn boosts CX while removing the tedium of more manual authentication processes. 

It also alleviates much of the organisational risk associated with approving transactions and allows merchants access to high-quality tools and strategies to better identify which orders are legitimate and which aren’t. That means better authentication, more conversions, fewer empty shopping carts, and better brand loyalty. 

Despite ongoing economic uncertainty, it seems as though consumers are still looking to spend. Critically, they’re looking to get more bang for their buck, driving increased competition among merchants for purchases and return customers. 

Understanding the dynamics of consumers’ motivations and loyalty is more important than ever. In this environment, merchants can’t afford to miss out on any chance at profit. Having a strong tech stack with payment orchestration at its core means they can worry less about conversions, risk, and friction, and more about strategies to keep customers returning time and time again. 

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