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5 ways to build a secure and effective payment environment

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Rob Crutchington of Encoded explains how to transform frontline teams into the best defence against card payment fraud…

The greatest fraud and security threat to an organisation is its people.  From opening rogue emails, clicking on links to visiting dodgy websites, staff pose a significant security risk.  In a few simple steps, organisations can turn this to their advantage and help contact centre agents become valuable security assets.

These steps include:

1. Keep a close eye on legislation

Organisations that follow PCI DSS, GDPR and other regulatory guidelines such as ISO and Cyber Essentials, are doing all they can to keep their customer data, and corporate reputation safe.  Continued protection depends on keeping up-to-date with regulatory changes and then communicating them effectively to staff

2. Make security awareness an intrinsic part of training

Regular awareness training will enable everyone from experienced team members to new joiners create a healthy security culture.  Help agents recognise the threats and give them coping strategies in the event of a security breach. Prevention is better than cure so publish a short ‘how to’ guide on digital safety so they don’t fall victims to rogue links or dubious websites.

3. Keep a record of everything

Organisations might consider taking out an insurance policy to mitigate their liability should they fall prey to a security breach but a piece of paper is not enough.  Keep a clear audit trail so that in the event of a claim when the insurance company asks ‘have you followed the right security protocols?’ organisations have the hard evidence to obtain compensation.

4. Go digital to protect customers and remote teams

Networks and equipment are largely out of the control of remote-working agents but modern de-scoping products are the answer, collecting payments outside the agent’s immediate environment.  Make de-scoping part of a Digital First strategy that maximises the benefits of eCommerce to protect customers and enable agents to meet corporate security goals.

5. Be safe and inclusive at the same time

Successful brands recognise their customers have different needs and focus on delivering a safe, frictionless phone card payment experience for everyone.  Add touchtone capabilities to existing out-of-hours IVR or agent-assist services.  Allowing customers to share their card details using a telephone keypad is one of the simplest ways to boost inclusivity.

For more tips and techniques, visit Encoded.

Rob Crutchington is CEO of Encoded

How do businesses balance digital trust with the level of customer experience that consumers have come to expect? A case study on Brooks Running

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As the retail landscape has evolved and ecosystems become increasingly digital, Brooks business expanded its revenue channels and adopted ecommerce. Of course, alongside rapid growth came a rising threat of fraud, specifically, fraudulent websites stealing credit card information from unsuspecting customers and using the Brooks website as part of a drop-shipping scheme.

The chargebacks that ensued threatened Brooks’ ability to process cards from key issuers. While the fraud prevention team were quick to react to new evidence of fraud, there was a growing awareness that they needed technology to stay ahead of fraudsters.

In its hunt for a technology partner, Brooks partnered up with Kount, an Equifax company, to establish an AI-driven, all-in-one fraud detection strategy. The platform’s data analysis capabilities and automation enabled Brooks to reduce its chargeback rate by 92%, eliminating the threat of card processing fraud monitoring programmes while accepting more good orders.

Although no one likes to be dragged through a convoluted string of security procedures, there is a consensus that online spaces require another layer of assurance. On-premises and online experiences can’t be like-for-like – nor should they be. By bringing in a degree of friction, Brooks was able to maintain the high standards it set for itself more than a hundred years prior.

With chargebacks under control, and a dramatic reduction in time spent carrying out manual reviews, Brooks started to focus on new overseas markets and was able to accept international credit cards. Kount’s technology solution allowed Brooks to achieve the right balance between automation and customisation, minimising fraud without creating too much friction or fallout for legitimate customers.

The advantages of Kount fraud protection technology are much more nuanced than simply driving more customers to a website and getting them to return more often. Kount is a single point of contact to resolve identity, fraud and chargeback related issues.

For more information or to set up a demo, please visit our Kount website.

Payment orchestration – why it’s good for business

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Payment orchestration promises to help support frictionless online payments, reduce transaction costs and provide a smoother customer experience. Encoded’s latest Ultimate Guide to Payment Orchestration explains how it works and why it’s good for business…

Providing customers more choice with payment methods when buying online means using an increasing amount of differing third-party technology and services, all of which must be managed by the merchant for consistent transaction success.

It can be difficult to navigate these different systems and payment methods, to deliver optimum conversion rates, manage costs and provide a smooth customer experience. Connecting to disparate payment service providers (PSPs), acquirers and banks also increases the risks to data and fraud, both for the customer and the business.

A better way to conduct business

A payment orchestration platform helps to achieve consistent, frictionless online payments for a smoother customer experience. It simplifies the payment process, increasing successful transaction rates and helping organisations to boost online sales and increase revenue. It manages the entire payment process from payer to payee securely, including payment authorisation, transaction routing and settlement.

Working independently of system providers and acquirers, payment orchestration manages multiple gateways, acquirers and payment methods, interchanging them dynamically, in real-time to enable optimum transaction flows at least cost.

Encoded’s Ultimate Guide to Payment Orchestration has the answers

Our latest guide explains in detail everything a merchant needs to know about payment orchestration and the benefits to business:

  • What is payment orchestration?
  • Why you should consider payment orchestration.
  • Features and benefits.
  • Questions to ask about payment orchestration.
  • Choosing the right technology partner.
  • Payment orchestration in action.

Reaping the benefits today

Payment orchestration can provide the flexibility to future-proof a business as customer preferences change, enabling faster growth with the ability to serve customers worldwide. Businesses can reduce costs with increased conversion rates, protect payments against fraud and provide a smoother customer journey.

To find out more about payment orchestration and Encoded’s payment solutions visit Encoded to download the Ultimate Guide to Payment Orchestration today.

Did my retail & ecommerce deliveries really go according to plan – and how to improve?

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Last mile delivery within retail and ecommerce is complex and vital to get right. It impacts customer satisfaction and experience, repeat business, brand perception and profitability, among other things. Understandably, therefore, logistics and delivery planning teams tend to spend a significant amount of time preparing their delivery routes, developing the most cost-effective, environmentally friendly plans for their delivery teams and fleets to execute. Creating an optimised route plan for deliveries is the first step to maximising fleet performance and providing a positive customer experience. 

However, a great plan only matters when it is executed – and that’s the challenge for many fleet operators. Sure, tracking drivers with GPS helps, but the problem is not that simple as there are several areas where deviations from the plan occur. For instance, some deviations are voluntary (e.g. a driver decides to change the delivery sequence) and others are involuntary (e.g. there is a road closure not captured in the digital map data). In many cases, deviation from the plan starts well before a driver even gets on the road.

Therefore, to get better control of fleet performance, retailers need to track “plan” versus “actual” performance. Chris Jones, EVP, Descartes explains…

Defining “Plan” Vs. “Actual” Performance 

There are three key points to understand when it comes to plan versus actual performance, and how retail fleet operators can use that information to maximise fleet performance and customer experience.

1. Start with an Optimised Route Plan 

Many fleet operators make use of route planning solutions to support with retail and ecommerce deliveries. Today’s advanced route optimisation solutions are very adept at considering all the business constraints and evaluating the tradeoffs between having specific orders on particular routes, and the sequence that they are delivered in. They look holistically to find the best combination of routes and sequences that will meet customer delivery requirements for the lowest delivered costs.

While not perfect, if the route planning solution is configured correctly, it will consistently outperform the human mind to find the most cost-efficient route plan. For this discussion, let’s consider that the plan initially generated by the system is the starting measuring point and has the best potential results.

2. Evaluate the Impact of Changes Made by Planners 

Once a plan is initially created it is typically reviewed by a planner to ensure there are not any inconsistencies that could impact delivery performance, and account for any conditions that were not considered in the system configuration, or not possible to model. This step is the first place where deviation from the initial optimised plan can occur.

For legitimate and arbitrary reasons, planners make changes to optimised routes. For instance, the planner knows that the solution doesn’t fully capture a constraint and the number of deliveries that a specific truck can execute.

Equally, a planner may have preconceived notions about what a route should “look like” and make changes to have it appear in a certain way on the digital map. In either case, the optimised plan has been adjusted and the results fall into two categories: more optimised and better performance or less optimised and lower performance. These changes need to be captured and compared to the initially optimised plan.

3. Track Execution and Capture Deviations that Impact It

Once the planner is finished making their adjustments, the plan is published to the driver. Let’s assume that all the deliveries are on the truck and the driver starts executing the route, which is tracked by GPS. Here again, the driver can deviate from the route plan for legitimate and arbitrary reasons.

The driver knows that a certain customer will take orders earlier than indicated in the route plan and changes the delivery sequence to be more efficient, or the driver likes to stop at a specific location because the facilities are better or the food and beverage options more appealing. Then there are events that are out of the driver’s control, which can change the route plan. For example, a customer cancels a delivery or an accident closes a road. All the driver changes and external events need to be captured to get a complete picture of the deviations during route execution.

The Complete Plan Versus Actual Picture

Capturing these points gives fleet managers a comprehensive view of plan through actual execution, and better control of performance outcomes. Managers will know the plan’s starting point in terms of cost and customer service, how the planner’s changes impacted cost and service, and the same for the driver’s changes and external events – all important factors to consider with rising costs for home delivery and fleet operations.

Placed side-by-side, the manager can see (1) if the plan was not as optimal or feasible as possible, (2) the degree to which planners are changing the original plan and why and the degree drivers are deviating and why. With this information, managers can take corrective action to (1) improve the quality of the initial optimised plan through configuration changes, (2) identify which planners are over-editing the plan and negatively impacting costs and customer service, and (3) better manage driver adherence to plan and understand the degree that external events are impacting delivery performance.

Technology Can Refine and Optimise the Review Process

Technology is advancing efficiency across the retail sector continually. It can make the home delivery plan versus actual review process easier, eliminate some of the causes of deviation to plans that have a negative impact on performance; but it can also take into account deviation that had a positive impact. This is how technology supports.

  • Data analytics integrated with the planning and execution solution can accelerate the plan versus actual performance analysis. One of the biggest challenges is collecting, organising, and correlating the tremendous amount of data that route planning and GPS-based execution solutions generate.

The advent of powerful, but intuitive and low-cost analytics platforms such as Microsoft PowerBI™ that has standardised integration to route planning and execution solutions streamlines the data management process and gives deep insights into plan versus actual performance.

  • How machine learning helps capture plan versus actual performance. Tracking fleet plan versus actual delivery performance is an excellent application for machine learning because of all the data that is created in the route planning through execution process.
    Machine learning can more accurately identify actual stop location, drive, service and stop times, and other patterns such as changes in stop sequence. These recommendations can be applied to the optimised planning solution to create more accurate and productive route plans.
    Machine learning can also identify which planners and drivers are outliers to capture best practices or coach poorer performers.
  • Robotic process automation can eliminate some of the causes of plan versus actual deviation. Unfortunately, planner performance can vary widely resulting in significant deviations to the initial optimised plan and poorer plan performance.

By capturing and automating the planning practices of the best planners using robotic process automation, fleet operators can eliminate many of the post-optimisation tweaking that occurs during the planning review phase. Consequently, there will be fewer changes, more predictable planning outcomes across the organisation, shorter planning reviews, and greater planner productivity.

Conclusion

Plan versus actual delivery performance analysis is an important process for pinpointing and improving the practices and actions that planners and drivers take that negatively impact home delivery performance for retailers.

Using this three-point approach described allows managers within retail and ecommerce organisations to capture the changes that impact home delivery performance. When combined with technological advances such as data analytics, machine learning, and robotic process automation, fleet operations can implement powerful plan versus actual performance processes that drive delivery fleet performance and improvements to the bottom line.

How fraudsters are taking advantage of omnichannel retail – and how to fight back

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Ever quick to adapt their tactics, fraudsters are wasting no time finding new ways to exploit opportunities in a world of fast digital payments and increasingly connected commerce.

Growing instances of fraudsters paying for an item online and then cancelling the payment directly before collecting, or using stolen credit cards and false identities to create online accounts and place orders to then collect in person by presenting a fake ID.

Kount, a company of Equifax, found that 90% of retailers are operating across multiple channels, yet only half are effectively managing fraud across them.

“The problem is that the majority of a business is focused purely on increasing revenue. The challenge for retailers is making their products and services more accessible to customers while keeping the fraudsters out. As more businesses adopt an omnichannel strategy, the challenge becomes greater,” say Simon Vallis, head of international partnerships at Kount.

Emile Naus, a partner at independent management consultancy BearingPoint, says: “If businesses don’t adjust their loss prevention activities, they leave themselves open to significant issues. Effective fraud prevention requires a multi-layered approach, which starts with retailers understanding their customers and setting up customer data effectively and securely.”

Kount helps our clients to create customised fraud strategies to meet their specific business needs by combining AI machine learning with their bespoke business policies. We use global data intelligence to help our clients identify and implement acquired insights as well as spot new market opportunities.

Kount addresses the challenges that are not only associated with a payment but across every customer touch point, from new account creation, preventing account takeover, promotional code abuse and more. Kount offers everything you need in one easy-to-use platform.

Kount’s data-driven decisions and decades of unrivalled fraud experience solving complex identity and fraud issues have helped 15,000 merchants around the globe in almost every vertical.

For more information or to set up a demo, please visit our Kount website.

Are you ready for the eCommerce Forum in February?

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Taking place on 6th February 2024 at the Hilton London Canary Wharf, the complimentary eCommerce Forum event is an opportunity to meet 1-2-1 with leading solution providers, attend insightful seminars from industry thought leaders, and network with other ecommerce professionals.

Are you a professional within the ecommerce industry, and would this event be of interest to you? – Attendance is completely free!

Book Online Here

Your complimentary pass includes:

– A corporate “speed-dating” itinerary of one-to-one meetings with solution providers
– A seat at our industry seminar sessions (included within your itinerary)
– Complimentary meals and refreshments throughout
– Networking breaks to make new connections in your field

For more information please don’t hesitate to contact us.

Are you confident in your ability to combat chargeback fraud?

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The last few years has shown significant growth for card-not-present retailers. Recent reports from Visa show transaction volume surged by an impressive 51% from 2019 to 2021.

Unfortunately, disputes also began to climb, growing 29% over the same period, from just under 6 million disputes filed to nearly 8 million in 2021.

Friendly fraud, or first-party fraud, occurs when legitimate customers dispute legitimate online purchases with their issuing banks or credit card companies.They may do this for any number of reasons, but the consequences for retailers are the same. If the bank sides with the customer, the dispute becomes a chargeback.

If a retailer’s chargeback rate exceeds 1%, they are put on a Visa or Mastercard card processing fraud monitoring programme which will result in fines and increased fees to the schemes. Unless they can reduce the rate to less than 1% within three months, these key card issuers may prevent them from taking card payments altogether.

40% of consumers say if they’re declined at the point of payment, they will go to a competitor. So the retailer also risks losing the value of that checkout for the lifetime value of a customer who may never come back.

Within the new regulatory framework of PSD2, to avoid friction and possible basket abandonment, retailers need to leverage exemption. But many need support to apply exemptions while meeting the regulatory requirements.

Kount, an Equifax company, has built a set of tools to aid retailers struggling to meet these demands while preventing disputes from progressing to chargebacks unnecessarily. Kount scrapes information from transactions and sends the data to issuers in real time, by identifying issues within 24 hours, retailers can stop the shipment of goods on disputed orders, retain fulfilment, shipping, and product costs.

This support system allows retailers to implement a complete strategy to protect themselves from pre- through to post-authorisation, and in turn reduce chargeback rates by 60-70%.

For more information or to set up a demo, please visit our Kount website.

Introducing Intelligent Acceptance: Solving the $50.7 billion payment performance problem

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Payments are so ubiquitous that we often forget that each one is a unique combination of data points that are catapulted across providers, players, systems and ecosystems with one outcome in mind—to be approved. But behind the simplicity of this equation are millions of optimizations that need to take place to ensure success.

When optimized correctly a payment creates, captures and compounds in value. When done wrong it’s not just a lost payment, it’s lost revenue and lost customers for your business. Checkout.com has partnered with Oxford Economics to actively track and measure the cost and losses of payment performance since 2019.

In 2022 as much as $50.7 billion in lost revenue occurred due to false declines and that number is growing. Worse yet, the contributing factors for those declines were often variables beyond a merchant’s sphere of influence and sat firmly with issuers, schemes and their payment providers.

So as a business that likes revenue how do you combat the false decline problem if you don’t have the control, data or influence to inspire change? How do you determine how big this performance problem is for your business? The first step is unboxing payments.

Unboxing the payment black box

The payment sphere involves multiple players like issuers, schemes, and payment service providers, each with unique frameworks, rules, preferences, and technologies impacting processing. These details affect performance, contributing to the $50.7 billion issue.

For instance, SCA exemptions have varied routes and types, chosen by players through approval or decline codes. Complexity grows with evolving preferences and technologies. New instruments like Network Tokens and 3D Secure 2.3.1 evolve at varying paces based on regions and roadmaps. Legacy systems, often patched, harbor bugs and inefficiencies. All payments navigate these layers.

Amidst this complexity, modern PSPs employ AI but often lack transparency in optimization results. This prompts questions about approval in such an intricate environment. The truth is that while AI aids, visibility into optimization success, including decline resolution, remains lacking for many customers.

Find out more about Payment optimisation and intelligent acceptance.

Payment Orchestration – Why it’s time to call the tune

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By Rob Crutchington, CEO at Encoded

Frictionless online payments reduce abandoned shopping baskets and increase customer loyalty. Payment orchestration simplifies the payment process, improves customer experience and helps merchants to boost online sales and increase revenue…

The payment transaction process is not a simple one. Merchants’ systems connect to different payment service providers (PSPs), acquirers and banks, with potential risks of data theft and fraud. This is where payment orchestration can make a difference.

A Better Way to Conduct Business

A payment orchestration platform is a single software layer for processing secure, frictionless payments from payer to payee. It can work independently of a gateway payment provider and is not affiliated with one acquirer, and it can manage payment methods dynamically in real-time.

Six ways payment orchestration benefits business:

  1. Reduces costs with increased conversion rates – integrating with different card issuers, card schemes, gateways, open banking and acquirers, enables merchants to work out the best possible terms and rates. Intelligent, dynamic routing sends transactions to the most appropriate payment and least cost acquirer. 
  2. Provides a smoother customer journey – by dynamically selecting the best payment option it protects against failed transactions to deliver a more reliable customer experience.
  3. Harmonises and simplifies the payment process – as a single platform, payment orchestration simplifies payments, making it easier for businesses to manage and track transactions across different service providers and methods, such as ApplePay, GooglePay, Samsung Pay and Open Banking. 
  4. Ensures secure payments to protect against fraud – with built-in security features, such as fraud detection and data encryption, a payment orchestration layer protects sensitive customer information and helps adhere to regulatory requirements.
  5. Enables faster growth and to serve customers worldwide – payment orchestration enables easy integration with new payment service providers and payment types, local or international. Businesses can grow without significant infrastructure changes.
  6. Future-proofs a business – adopting a single, feature rich and simple to use Application Programming Interface (API) which grants access to multiple acquirers and payment options, future-proofs any business as new ways for customers to pay are introduced and preferences change.

To find out how to simplify payment processes, enhance your customer experience and increase revenues, visit Encoded.

INDUSTRY SPOTLIGHT: Kount – Combining AI machine learning to tackle fraud and identity theft

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“eCommerce purchases are expected to grow 10.4% in 20231. However, over £1.2 billion was stolen by criminals through authorised and unauthorised fraud in 2022, equivalent to over £2,300 every minute2.”

The speed with which digital innovation has exploded presents new fraud challenges that require a fast and agile response. Businesses face dual pressures: innovate and deliver new revenue, while minimising losses from eCommerce fraud and chargebacks.

Kount, an Equifax company, uses data driven decisions and decades of unrivalled fraud experience to solve complex identity and fraud issues for 15,000 merchants around the globe in almost every vertical.

An effective identity and fraud solution must be able to address the challenges that are not only associated with a payment but across every customer touch point, from new account creation, preventing account takeover, promotional code abuse and more. Kount offers everything you need in one easy-to-use platform.

With Kount you can:

  • Leverage Kount’s global data network to detect fraud as it emerges
  • Enable intelligent transaction routing strategy to create a frictionless experience for good customers whilst blocking or challenging potential fraudsters.
  • Create a customised fraud strategy to meet your specific business needs by combining AI machine learning with your bespoke business policies
  • Use global data intelligence to identify and implement acquired insights as well as spot new market opportunities

Post payment Kount continues to protect merchants and stops ‘friendly fraud’ by preventing non fraudulent disputes progressing to a chargeback through instant communication with global Issuing banks thus saving the merchant from non recoverable monetary losses by the avoidance chargeback fees.

From the Kount dashboard, clients can manage and automate disputes prevention in real time across the payment networks.

Many businesses today are using multiple solution providers whereas Kount clients have access to a single point of contact to resolve their identity, fraud and chargeback related issues. One complete strategy to safeguards our clients so they can focus on revenue growth.

For more information or to set up a demo, please visit our Kount website.

1 Forbes, 2023

2 Finance Org, 2022