Three Key Findings from MRC’s Global Payments Survey
As all merchants know by now, the ecommerce environment is not short on sources of revenue loss. However, the MRC Global Payments Survey 2016 demonstrates a surprising shift in perspective on that subject.
Merchants are finally starting to realize that one catch-all solution will not do the trick; instead, merchants need different approaches and solutions to decrease costs while increasing revenue.
Reimagining Payments as a Potential Revenue Source
In the past, ecommerce merchants saw payments as essentially just a step in the order fulfillment process. Merchants now understand that the payment process is much more than a simple transfer of funds.
Including payments as a primary element of the business’s overall structure can deliver huge benefits for merchants. For example, checkout friction and false positives generated by fraud filters are two of the primary drivers of shopping cart abandonment, potentially costing merchants more than $4 trillion annually. Therefore, responsive ecommerce merchants find that reevaluating the way in which we think of payments can actually unlock huge reserves of untapped revenue.
Responsive merchants will continue to embrace more effective payment management, seeing it as less of a necessity and more of an investment and a source of revenue.
Three Core Lessons From the MRC Report
The Merchant Risk Council is a major trade group representing hundreds of merchants and solution providers across the world. My company, Chargebacks911™, is a fully-vested member of this elite organization.
The group organizes several industry event each year, while also providing a steady stream of valuable information and resources to member organizations. Most recently, the MRC released the results of their annual Global Payments Survey on May 20, 2016, reflecting the experiences and insights of nearly 200 different ecommerce merchants.
This report is one of the industry’s most high-profile and relevant glimpses into the real state of ecommerce fraud. I wanted to take a moment to examine this new information and what it means for merchants.
1. The US and Europe aren’t the Only Major Markets
In the past, ecommerce merchants found that the vast majority of their customers came from the US and Europe. However, those two regions are not overwhelmingly dominant in the way they once were.
| Markets Increasing in Popularity |
| Canada |
| Australia |
| China |
| Japan |
| Brazil |
When asked about their top five markets, merchants cited the US as a clear leader, making it a top preference for 86% of merchants. However, the Asia Pacific region demonstrated the greatest year-over-year growth between 2014 and 2015. The popularity of China and Japan more than doubled and Australia increasing by more than 80%.
At the same time, growth in market dominance remained largely static in the UK, while Germany, France and Spain all declined significantly.
With the exciting opportunities presented by developing markets, there’s never been a better time for merchants to start thinking critically about how to develop new revenue sources. By adopting such practices as pre-authorizations and fine-tuning fraud filters, merchants can boost their conversion rates dramatically and capture billions of dollars in revenue.
2. Consumers Want More Payment Options
| Country | Consumer Preference |
| United States | Payment Cards |
| United Kingdom | Payment Cards |
| Canada | Payment Cards |
| Germany | Bank Transfers |
| France | Digital Wallets |
| Australia | Gift Cards/Vouchers |
| China | Digital Wallets |
| Spain | Payment Cards |
| Japan | Digital Wallets |
| Brazil | Bank Transfers |
Alternative forms of payment such as bank transfers and digital wallets are exceptionally popular in Europe and the Asia Pacific, two of the world’s hottest ecommerce markets.
Interestingly, while payments cards are almost universally accepted throughout the top ten largest markets in 2015, they were not always most popular with consumers. The adjacent figure shows the most widely used ecommerce payment method in each of those markets.
In terms of payment method adoption, larger merchants lead the charge, supporting more than double the number of different payment methods as offered by smaller merchants. In addition, larger merchants were much more likely to offer their own native retail apps.
3. Multi-Layer Fraud Management On the Rise
The data also suggested that more and more merchants are incorporating manual reviews into their fraud detection process, rather than solely relying on automated fraud filters.
On the one hand, that is a positive indicator—a greater willingness to conduct manual reviews suggests that merchants are taking dynamic fraud prevention seriously. At the same time, in-house manual fraud reviews are costly and time-consuming.
Merchants Using 3D Secure67%
33%
Yes No |
It’s an all-around better option for merchant to turn to professional services, like Chargebacks911™. A payments expert can make fraud filters more effective so that false positives happen less frequently, while also streamlining the review process for greater efficiency and effectiveness.
This, in combination with additional fraud prevention tools like AVS, CVV, SecureCode and Verified by Visa, forms a multi-layered, adaptable fraud net, giving merchants the best chance of retaining revenue.
Unfortunately, fears of increased friction continues to prevent merchants from adopting additional fraud detection techniques. Despite the benefits, only 33% of global merchants use 3D Secure, and in the in US, that number drops to 18%.
The fear that additional screening will increase friction and shopping cart abandonment is understandable. However, the reduction in fraud and false positives will more than make up for any potential loss.
Keeping Up with Ecommerce Change
It’s vital that merchants take this information to heart. Reports such as the MRC Global Payments Survey offer an invaluable glimpse into the reality of the ecommerce industry.
Using these insights, we can clearly observe where merchants stand in regard to their customers, as well as the trends that will dictate where the industry is headed.
The full 2016 MRC Global Payments Survey offers more detail on these figures, as well as a host of other enlightening information for the payments industry.
MRC members can download the full report here—just sign-in to get all of the info.
