Challenge Statement
Commerce Protection Buyer’s Guide
A comprehensive resource for ecommerce merchants evaluating commerce protection solutions.
Introduction
Though it may be tempting to use the phrases ‘fraud prevention’ and ‘commerce protection’ interchangeably, each term represents a different strategy towards protecting your business.
While the tools available to merchants have historically approached order review and fraud management from the lens of preventing losses, commerce protection has evolved in recent years and reframes the problem to solve what represents the bigger loss for merchants – sales falsely declined due to fear of fraud.
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A brief history of fraud prevention
There are three distinct generations of traditional fraud prevention strategies and solutions that are still leveraged today – static fraud filters, manual review, and scoring solutions.
Provided by payment processors, fraud filters look at simplistic fraud indicators such as AVS mismatch to accept or reject orders.
Manual Review
Fraud filters are often paired with manual review, such that the segment of order traffic that cannot be easily confirmed as legitimate or fraudulent by the system is rerouted to a risk agent for manual review.
Manual review
Merchants are provided with a risk score indicating the likelihood that an order will turn out fraudulent. The score provides the backbone of rulesets built within these systems, with many merchants establishing rules that approve, reject, or hold for manual review orders based on their risk score.
Automated Machine Learning
Provided by payment processors, fraud filters look at simplistic fraud indicators such as AVS mismatch to accept or reject orders.
Static fraud filters
The arrival of modern day commerce protection
Commerce protection is the new frontier of the payment security and fraud prevention. It takes what the previous generation of fraud prevention brought to market and builds upon it to establish a comprehensive solution that protects both merchants and their customers across the entire shopper's journey. Most importantly, commerce protection removes the fear of fraud from the order decisioning equation and allows merchants to optimize for revenue attainment rather than risk elimination.
10% of orders are declined due to fear of fraud when average fraud pressure sits at just 1%.
The anatomy of a commerce protection solution
The backbone of commerce protection is a liability shift that eliminates fraud losses for merchants by backing every approved order with a 100 percent financial guarantee against fraud. If an approved order turns out to be fraudulent, the merchant is reimbursed in full for the cost of the chargeback.
The foundation of any commerce protection solution.
Unites network insights with information specific to an incoming order to identify patterns that either confirm legitimacy or indicate fraud.
Frees merchants from the burden of fraud liability and enables them to optimize for profit rather than minimize for losses.
Merchant-facing modules that provide both visibility into the platform network and decision engine and the control levers that ultimately give merchants final say over how they protect their business.
Commerce protection use cases
Fear of fraud manifests as a variety of business challenges including manual order reviews, revenue leakage, poor customer experience and customer drop-off. The four most common use cases of commerce protection – order automation, conversion optimization, cross-border expansion and omnichannel commerce – demonstrate how a comprehensive commerce protection solution protects the shoppers journey, solving each of these challenges.
Omnichannel commerce
Order automation
Cross-border expansion
Conversion optimization
An order assessment that delivers a definitive approve / decline decision in real-time, sending approved orders through to fulfillment without the need for manual intervention.
Omnichannel commerce
Order automation
Cross-border expansion
The process of continuous improvement at conversion checkpoints across the shopper journey made possible by machine learning models that learn from both the decision and outcome of orders backed by a financial guarantee against fraud and abuse.
Conversion optimization
Order automation
Cross-border expansion
Conversion optimization
Omnichannel commerce
44% of retailers say offering BOPIS is a competitive must. 37% offer BOPIS because of the additional purchases shoppers end up making in store. But these new experiences come with added risk, and require instant order decisioning in order to meet fulfillment SLAs.
Order automation
Cross-border expansion
Merchants deny cross-border orders at a more than 2x greater rate than domestic orders.
Omnichannel commerce
Conversion optimization
RFI for commerce protection
Not sure where to get started with your RFI? We have put together an exhaustive list of RFI considerations and questions when evaluating commerce protection vendors that you can leverage within your own evaluation process.
Download the complete guide to access the RFI Template
Evaluating ROI
When evaluating for ROI, consider the monetary, productivity, and customer lifetime returns each solution can provide.
Productivity returns
Monetary returns
Increases in bank authorizations
Customer lifetime returns
Increases in order approval rates
Elimination of fraud chargebacks
Reduction in training and hiring costs
Reduction in order cancellations due to manual review
Reduction in chargeback-associated costs
Revenue recovered by chargeback contestment
Reduction in manual review hours
Reduction in customer returns
Reduction in call center volume
Reduction in onboarding and training requirements
Increase in customer lifetime value
Reduction in order fulfillment time
Reduction in customer insult due to falsely declined orders
Improvements in Customer Satisfaction Score (CSAT)
Improved call center metrics
Building a business case internally
Now, it's time for you to take the sales hot seat and build buy-in internally from executive sponsors and cross-functional stakeholders alike.
To do so successfully, it’s important to bring the right stakeholders to the table, demonstrate the unique value for each specific team and their priorities, and do so in a fashion that clearly articulates the results that the business should expect to see by adopting Commerce Protection.
Identifying your internal stakeholders
Operations Leader
KPIs
Relevant Commerce Protection Value
Operational efficiency and profitability
Seamless login to checkout journey
KPIs
Operational scalability through order automation and reduction in manual review
Relevant Commerce Protection Value
Finance Leader
KPIs
Relevant Commerce Protection Value
KPIs
Greater revenue generation through capture of more good orders, elimination of fraud chargebacks, and recovery of abusive chargebacks
Relevant Commerce Protection Value
Top line growth
Operational efficiency and profitability
Full P&L
Customer Support / Experience Leader
KPIs
Relevant Commerce Protection Value
CSAT
Customer Retention
Customer Reviews and Advocacy
KPIs
Greater customer satisfaction through order automation, reduction in manual review and reduction in false declines
Greater productivity and operational scalability through reduction in support center call volume
Relevant Commerce Protection Value
Risk Leader
KPIs
Relevant Commerce Protection Value
Marketing Leader
KPIs
Relevant Commerce Protection Value
Product Leader
KPIs
Relevant Commerce Protection Value
Fraud Chargebacks
False Decline Rates
Abuse Chargebacks
Scaling Manual Review
KPIs
Reduction in chargeback
rates due to fraud and abuse
Top line growth
Repeat visitors / CLTV
Return on Ad Spend (RoAS)
KPIs
Conversion optimization through reduction in false declines and capture of greater customer lifetime value
Relevant Commerce Protection Value
Greater customer satisfaction through order automation, reduction in manual review and reduction in false declines
Top line growth
Profit / Loss
Customer Experience
KPIs
Greater operational scalability through order automation and manual review
Increased control over business policy management and abuse prevention
Greater productivity and operational scalability through reduction in support center call volume
Ecommerce Leader
KPIs
Relevant Commerce Protection Value
Building a business case for commerce protection
A bulletproof business case should distill all the research that you have done to point you towards your chosen provider and clearly articulate the challenge, solution, and value that the partnership will bring.
The challenge that needs solving and the urgency for solving it. Should include organization goals that are not being met and how this is impacting the overall health of the business.
Solutions Proposal
Overview of provider, their commerce protection approach, the solution and how it works.
Values & Benefits Statement
The value that the proposed solution will bring to the business, including what goals will be supported and how that will impact the overall health of the business.
How to evaluate commerce protection tools
A successful and streamlined evaluation process starts with your own independent research leveraging a diverse slate of resources, followed by a well-structured RFI questionnaire and solution scoring process, ROI calculations and comparisons, and finally, once a top contender is identified, a bullet-proof business case to win buy-in internally.
What to look for
Product review sites
Write a full review
What to look for
Analyst reports
What to look for
Provider websites & marketing collateral
Number of reviews and overall score A measure of market presence and customer satisfaction
Skew of review ratings
Does this provider have any 1 or 2 star rankings? If so, dig into why
Recent reviews
What are customers saying about the provider? Are there themes in strengths and weaknesses mentioned?
Hint: Check out G2 Ecommerce Fraud Protection category to discover top performing commerce protection
Provider strength / weaknesses and analyst recommendations
Comparison analysis of vendors within the market and the type of companies they are best suited to protect (ie company size, geo, vertical, fraud challenges etc)
Analyst rankings
An third-party, unbiased assessment of how a given solution compares to other solutions in the market
R&D investments and product roadmap details
A measure of how a provider continues to evolve ahead of fraud
Value propositions
What value do they promise? Can they back it up with specific examples and results?
Solutions and products
Do they offer solutions that address your unique business challenges? (ie INR protection, return abuse, chargeback recovery)
Marquee customers
What customers are featured throughout the provider’s site? Are one or two logos featured repeatedly? Are featured customers relevant to your business?
Network data hub
Do they showcase data from their merchant network? If so, can they speak to the challenges in your vertical, geo, and commercial segment?
Your backpocket guide to RFIs
As you can see, there’s a lot to consider when evaluating commerce protection providers. Finding the right solution for your business requires asking the right questions – but to ask the right questions you must first know what to look for. Download the full Commerce Protection Guide below for more of the answers (and questions) you need to make your RFI process a success.
Regardless of the provider you choose, your adoption of commerce protection is a strategic one. Here’s to many more happy shoppers to come!
Download the full Buyer's Guide
Monetary Impact
Pricing structure of the solution and overall economic impact.
Ecommerce sales
Full P&L
KPIs
Conversion optimization through reduction in false declines and capture of greater customer lifetime value
Operational scalability through order automation and reduction in manual review
Legacy Fraud Prevention
Commerce Protection
PRODUCT / FEATURES
Cross-merchant network, AI-powered machine learning, real-time order decisioning, liability shift, merchant-facing control capabilities
RESULT
Increase conversions, eliminate fraud and abuse
SOLUTION
Liability shift
PROBLEM
Fear of Fraud
Commerce Protection
PRODUCT / FEATURES
Fraud Filters, Rules Engines, Scoring Solutions, ML and Network-Enriched Scoring Solutions
RESULT
Reduce chargebacks
SOLUTION
Static fraud rules, risk scores
PROBLEM
Fraud
Legacy Fraud Prevention
Implementation Plan
Details on implementation support, integration partners, and expectations for onboarding.
Make Your Own Bullet Proof Business Case
Download the full guide for more business case tips and references.
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Legacy Fraud Prevention
Commerce Protection
PRODUCT / FEATURES
Cross-merchant network, AI-powered machine learning, real-time order decisioning, liability shift, merchant-facing control capabilities
RESULT
Eliminate fraud and abuse, increase conversions
SOLUTION
Liability shift
PROBLEM
Fear of Fraud
Commerce Protection
PRODUCT / FEATURES
Fraud Filters, Rules Engines, Scoring Solutions, ML and Network-Enriched Scoring Solutions
RESULT
Reduce chargebacks
SOLUTION
Static fraud rules, risk scores
PROBLEM
Fraud
Legacy Fraud Prevention
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Productivity
Returns
Customer
Lifetime Returns
Monetary
Returns
Productivity
Returns
Customer
Lifetime Returns
Monetary
Returns
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Merchants are provided with a risk score indicating the likelihood that an order will turn out fraudulent. The score provides the backbone of rulesets built within these systems, with many merchants establishing rules that approve, reject, or hold for manual review orders based on their risk score.
Scoring solutions
Manual review
Static fraud filters
Fraud filters are often paired with manual review, such that the segment of order traffic that cannot be easily confirmed as legitimate or fraudulent by the system is rerouted to a risk agent for manual review.
Manual review
Scoring solutions
Static fraud filters
Manual review
Scoring solutions
Here's why
In psychology, there is a well-known phenomenon known as negativity bias – a bias hardwired into our brains that makes the saliency of one very negative experience far greater than the many positive or neutral experiences that occur more regularly. It is this negativity bias that causes many of us to assume the worst during a rough bout of airplane turbulence. And it is this negativity bias that leads merchants to decline more than 10% of orders when intrinsic fraud pressure across ecommerce sits at just 1%.
HERE'S WHY
When the fear of fraud factors into the equation, negativity bias becomes ingrained in order decisioning. It starts when a merchant is hit hard by a massive fraud attack, causing them to enact stricter, more conservative rules. While dramatically reducing chargeback rates, these strict rules throw out more good orders than bad. And if there is any element of machine learning built into their fraud prevention solution, merchants will actually see approval rates get worse over time as the machine learns, encodes, and amplifies this negativity bias.
That’s why when a merchant leveraging a legacy scoring or rules-based solution tells us that they do not have a fraud problem, it indicates to us that they may have a false decline problem instead.
HERE'S WHY
In psychology, there is a well-known phenomenon known as negativity bias – a bias hardwired into our brains that makes the saliency of one very negative experience far greater than the many positive or neutral experiences that occur more regularly. It is this negativity bias that causes many of us to assume the worst during a rough bout of airplane turbulence. And it is this negativity bias that leads merchants to decline more than 10% of orders when intrinsic fraud pressure across ecommerce sits at just 1%.
HERE'S WHY
When the fear of fraud factors into the equation, negativity bias becomes ingrained in order decisioning. It starts when a merchant is hit hard by a massive fraud attack, causing them to enact stricter, more conservative rules. While dramatically reducing chargeback rates, these strict rules throw out more good orders than bad. And if there is any element of machine learning built into their fraud prevention solution, merchants will actually see approval rates get worse over time as the machine learns, encodes, and amplifies this negativity bias.
That’s why when a merchant leveraging a legacy scoring or rules-based solution tells us that they do not have a fraud problem, it indicates to us that they may have a false decline problem instead.
HERE'S WHY
Researching Providers
Write a review
Productivity returns
Customer lifetime returns
Monetary returns
Productivity returns
Customer lifetime returns
Monetary returns
Relevant Commerce Protection Value
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