False declines: the hidden profit-killer

October 13, 2015 Payments
Jeremy Milk
By Jeremy Milk, Head of Marketing
Jeremy Milk
By Jeremy Milk, Head of Marketing

Sometimes you can’t really start talking about a problem until somebody puts a number next to it. So a big thank you to the folks at Riskified for this number:

$118 billion.

That’s how much they say US merchants are losing each year due to online transactions being wrongly declined as fraud.

creditcarddecline

It’s a shockingly high number. But it starts to make sense when you think about the total cost of improperly flagging good shoppers. Riskified’s research reported 32% felt so wronged that they choose to take their business elsewhere ongoing.

In other words, a false decline doesn’t just mean losing that transaction — it often means losing a lifetime of subsequent transactions.

This takes us right to a related point that folks often miss. Risk management isn’t often discussed in the context of user experience, when in fact it should be front & center.

Developers spend hours agonizing over stuff like the placement of buttons in their app, or what font they should use. Yet I defy you to find a font so bad it permanently turns away a third of the users who encounter it. 
Bottom line: regardless of whether you’re in a role to care about revenue or user experience, smart risk systems must be a forethought vs. an afterthought.

About the author

Jeremy Milk

Jeremy Milk, Head of Marketing

Jeremy is WePay's head of marketing. Earlier, he held marketing and product leadership roles for Intuit QuickBooks, where he got hooked on fintech, and The Clorox Company. He's also a die-hard UNC basketball fan.

More blog posts by Jeremy Milk