It’s an interesting fact that modern technologies are already continuously paving ways for business-to-business and business-to-customer experiences with mobile payments, e-wallets, and contactless cards. Statista predicted that the total transaction value of worldwide digital payments is expected to have an annual growth rate of 12.8% by 2023, more so, between 2017 and 2023, digital payments are forecasted to keep growing rapidly. With these new developments creeping in periodically, higher demands are being placed on service providers to facilitate a cashless society that can quickly and easily enable any purchase.
The main aim of every business or enterprise is to successfully solve his/her clients’ problems, not that alone but also making the service delivery and business modalities seamless and comfortable. With so much diversity in the global payments outlook, retailers need to be aware of consumers’ purchasing customs in their own region in order to develop and implement the payment methods that customers are seeking for.
Every innovation however comes with its own peculiarities which definitely includes some advantages and certain disadvantages, as Global Point of Sale payment methods has been forecasted to change dramatically between 2018 and 2022 (Worldpay), certain problems are beginning to set in as limitations to online payments over the past few years: In this piece, it is important to point out the issue of fraud and chargebacks experienced by businesses using contactless payments and how biometrics can solve them.
Overall, chargebacks and fraud account for less than 1% of all transactions globally. However, the rate is higher for e-commerce transactions, and it’s growing. Chargeback fraud, also known as friendly fraud, is a major problem for e-commerce retailers. This occurs when a consumer makes an online purchase and then requests a chargeback from their issuing bank after receiving the purchased goods or services.
Chargebacks are constituting a major challenge for most businesses in the online payments sector which creates excess costs and in the long run ruins brand equity. Chargebacks can also be a determining factor in the closing of an account. When a chargeback is approved, the merchant is accountable, regardless of the measures they took to verify the transaction.
Chargebacks, in addition to being costly, can damage business reputations; an excessive number of chargebacks can lead to closed merchant accounts, effectively killing the business. While chargebacks do sometimes happen for legitimate reasons, the use of customer service practices and technologies such as myidentitypay’s APIs based on know-your-customer principles, and merchant accessibility, can substantially reduce or eliminate chargebacks.
New technologies such as facial recognition are also being used by Fin-tech companies to reduce fraud and chargebacks. Consumers are becoming increasingly familiar with biometric identification, such as facial recognition, which is commonly used to –UNLOCK phones. It has now been upgraded and introduced to make payments in businesses conclusively increasing mobile payment security and preventing fraud. During the mobile payment process, the buyer simply scans their faces using a compatible mobile device, to prove their identity and proceeds to make payment after authentication has been made. This is a powerful tool for fraud prevention, as it ensures the person performing the transaction is truly authorized to do so. While a password or PIN code can be stolen or guessed, facial recognition data requires the buyer’s physical presence to make a purchase.
IdentityPay leverages the power of AI, biometrics and the latest technologies to streamline the identity verification process and help companies onboard customers remotely, comply with KYC regulations and better detect fraud, while also delivering a definitive yes/no decision in seconds. To get started with a merchant account, click on myidentitypay.com
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