Many online merchants in the United Kingdom may experience downtime during the holiday shopping season because their systems used to detect fraud card-not-present fraud may not be reliable or current, new research suggests.
UK-based independent market research consultant Dynamic Markets Ltd. conducted the research for Chase Paymentech Europe Ltd. through an online survey of 200 online merchants in November.
Chase Paymentech expects online sales to exceed £11.5 billion (US$18 billion or 13.5 billion euros), but many online merchants may experience a lag in sales because of unreliable card-not-present fraud systems, according to the research.
Of the merchants surveyed, 59% said they experienced downtime each month because of issues related to their card-not-present payment systems, amounting to a total of 72.8 hours per merchant of downtime per year when consumers were unable to complete an online transaction.
Many online merchants may have experience downtime because of unreliable fraud systems, and several merchants noted the issue was an important one they need to address, according to Chase Paymentech. Overall, 61% of participating merchants said they would switch to another fraud-management provider if the new system would reduce downtime.
Moreover, 79% of the participating online merchants’ finance directors noted that transactions are often not processed because poorly developed and multiple or outdated payment processing systems, Chase Paymentech notes in the report.
An opportunity exists for online merchants to increase revenue during the Christmas shopping period, but “many are unprepared for the impact the rush will have on their backend systems,” Shane Fitzpatrick, Chase Paymentech president and managing director of, said in a news release.
By the time a consumer reaches the payment stage when making a purchase, they already have “invested substantial time on the website. If the payment process fails, not only will it impact the merchant’s bottom line, but the consumer may choose to shop somewhere else,” Fitzpatrick said.
Errors within card-not-present fraud systems always have existed, but “clearly there is a heightened sense of those issues within the e-commerce space that needs to be resolved, especially in the short term,” Matt Simester, director of Auriemma Consulting Group in the UK, tells PaymentsSource.
Online merchants “need to keep themselves up to date with their security needs because implementing the best practices with fraud control is critical,” Simester says.
Additionally, “because many online merchants do not have the ability to have a face-to-face presence with consumers, they need to remember “that how they deal with the consumer is the most important part,” Simester says.
It may be beneficial for merchants and processors to put themselves into the purchase process and see how long it takes for the system to respond to a failed transaction, Simester contends.
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