As the recent surge of COVID-19 cases in India has taken hold, civic authorities across the country have imposed curfews and lockdowns to restrict individual movement and help curb the spread. A large number of people are turning to digital retail in droves. For India’s retail sector, the ability to swiftly and smoothly adapt is imperative. With choices growing daily, it is even more important that online retailers focus on new customers and improve their experience by ensuring it is smooth and secure.
The pandemic-induced lockdown and movement curbs marked an inflection point for e-commerce in India, pushing demand to record highs, nudging new buyers as well as sellers onto digital platforms.
According to a report, India’s e-commerce industry has the potential to grow 84 percent by 2024, driven by the impact of the pandemic. With consumers moving to digital shopping, using digital wallets, credit cards, and debit cards, the sector will swell to US$111 billion.
As the e-commerce sector booms, transactions and spends are increasing as well. And with it, the likelihood of fraud.
Preventing Fraud Through the Concept of New User Missed Opportunity
In its bid to elevate the way merchants combat fraud, whilst also ensuring that the customer journey is not compromised, Forter, a leader in e-commerce fraud prevention, unveiled its new user missed opportunity or NUMO concept. NUMO focuses on false positives and lost legitimate transactions – a scenario that happens when a purchase is declined due to the lack of a clear assessment of the risk involved. Given that the cost of a decline is up to 75 times the cost of actual fraud, tackling the false-positive challenge is paramount and merchants must say no to NUMO.
Where new users are concerned, it is vital to understand that developing a customer base and creating lifetime value is significant for business growth. Merchants need to recover the costs of acquiring customers by converting transactions at a very high rate. However, the false-positive challenge is far more acute with first-time buyers – they are five to seven times more likely to get declined and in 40 percent of those cases, they are unlikely to return. Such costs can add up to hundreds of crores of rupees.
There are a few considerations in association with NUMO such as the customer perspective that has to do with speed and ease of transactions, whereas for the merchants, their priority is to get access to new customers at a reasonable cost.
Developing an Ecosystem of Trust Between Merchants and Consumers
The key is to develop an ecosystem of trust that recognizes legitimate consumers in a much more efficient and impactful way. It is important for merchants to be able to assess a customer's trustworthiness without blocking a legitimate sale or delaying it so long that the customer abandons the purchase. This includes behavioral analysis of a customer’s established shopping patterns, soft linking which is the ability to trace relationships between users even when no overt information is shared, and other techniques.
Merchants must look into a fraud prevention platform that offers a suite of solutions for both themselves and payment organizations. The ability to provide real-time decisions with optimal accuracy, supported by machine learning capabilities will propel merchants into being able to deliver a trust-based experience to their customers.
One of the fallouts of the pandemic was a huge increase in online demand and concomitantly new kinds of shoppers. These include those who visit sites they have never been to before and those new to online shopping. Such changes will have a major impact on the digital transformation plans of companies. A typical five-year plan now needs to be implemented in five months. Concepts like NUMO are designed to ensure that online merchants and marketplaces stay on the cutting edge of change.