Response and control of payment fraud can unlock missed opportunities

Celia Pereiro

Head of Payments, Amadeus IT Group

On average, airlines reject 3.3% of bookings due to suspicion of fraud, according to Cybersource. As such, it is impossible to know exactly how many rejected bookings would have been valid. However, if we assume that the false positive rate is 5%, then even small airlines could be missing out on hundreds of thousands of dollars’ worth of revenue.

Smarter anti-fraud solutions which use traveller data to check for indicators that a transaction is fraudulent or not could go a long way towards realising these savings. For example, historical data which shows that a traveller has a history of making similar trips – even on different airlines – would add significantly to the accuracy of fraud checks.

3DSecure authenticates cardholders online by redirecting them to a hosted page where they must enter additional information to identify themselves. Technically, and from a usability perspective, there are many reasons for this to damage conversion rates – and that is why many online merchants don’t use it. However, the practice is enjoying something of a resurgence following research from Adyen which shows that, in some countries, 3DSecure actually increases the conversion rate.

In India, where use of 3DSecure is a legal requirement and therefore its absence is very suspicious to consumers, 3DSecure had the greatest positive impact on conversion ratios. Similarly, consumers in other markets, like the Russian Federation, Qatar, Czech Republic, Vietnam and Great Britain, also prefer sites with 3DSecure.

Interested in learning more about anti-fraud controls? Check out our Safeguarding information systems whitepaper for more.