Did you know that false positives cost American businesses about $50 billion in sales across 2021? Fraud detection software often flags legitimate customers and denies them access to goods and services.False positives turn consumers away at an alarming rate. But what exactly are false positives and how can you prevent them? Read on to answer these questions and learn how you can keep consumers both secure and satisfied.
In the world of sales, a false positive takes place when a real human customer is flagged as fraudulent. The payment processor or eCommerce site that the user attempts to purchase from denies them so that they can't make any purchases.
As you might imagine, this turns otherwise interested consumers away. It disrupts flagged customers' journeys since they cannot make their purchases and finish the sales funnel. Since about 73% of consumers view good experiences as vital to developing brand loyalty, false positives are extremely damaging.
False positives also have proven economic impacts on businesses. In fact, businesses globally lose about $118 billion annually as a result of false positives. This is 75% more loss than actual fraud costs, so it's counterproductive.
The primary reason for false decline is the use of rule engines. These systems are based on rule collections that definitively say when to accept a transaction vs when to deny it.
This is problematic because consumers are complicated and don't all undergo the same purchasing process. Some people will purchase items that they want shipped far away from their card's billing address. Others will make expensive purchases to treat themselves to after not having bought anything over $100 recently.
Purchasing patterns are just as complicated as the people buying from your shop. Inflexible rules-based anti-fraud algorithms leave no room for these complexities.
To eliminate the impacts of false positives, you'll want to invest in a solution that relies on machine learning rather than rigid rules. AI and machine learning increase approval rates for legitimate buyers while nipping digital fraud in the bud.
Vesta's tool uses machine learning backed by worldwide data gathered over the past 25 years. It then applies these metrics to its instant end-to-end transaction interface. Our approach also necessitates adaption to new fraud threats and user trends across the globe to ensure the best possible protection.
Implementing this model means that your system can accurately assess the risk of a purchase in 1/1000 of a second. The speed stops customers from becoming frustrated with lag times. Even more importantly, the accuracy means that you won't drive interested consumers away.
Now that you know what false positives are and how to prevent them, it's time to invest in the tools that you need to prevent fraud.
Vesta is committed to keeping your business safe while allowing you to grow and succeed. That's why we offer top-notch solutions for eCommerce shops, telcos, payment processors, and more. Request a free consultation to get a demo of our fraud prevention services today.