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Outdated Payment Systems Driving Customers Away

Consumer opinions are clear when it comes to card decline – 25% will never come back

London, 29th November 2010, Chase Paymentech Europe Limited, a leading merchant acquirer and payment processor, today announced the results from a national survey of 2,047 British consumers online experiences of Customer Not Present (CNP) payments systems. The survey highlighted that merchants do not have systems in place to deal with purchasing problems efficiently, causing brand erosion and loss of sales.

There is little doubt that when consumers cannot complete transactions due to their card being declined it is bad for business. The research conducted by Dynamic Markets*1 highlights that 76% of e-commerce sites are unable to automatically advise consumers of the reason why their card was declined. Furthermore, consumers are not advised on the next steps involved to complete the transaction. Hence they abandon their online purchase, possibly never to return.

The survey found that there was a noticeable difference between men and women’s reactions to having their card declined for no apparent reason. The most common reaction for both sexes was one of concern over fraud (37%). Embarrassment, anger and frustration were particularly high with women who were particularly concerned with overspending. Men were more open to continue shopping with the merchant if the situation could be resolved and if they could be advised why their card had been declined.

Another distinction is the reaction of consumers regionally with those in the West Midlands standing out as a group of consumers with very strong feelings about having their card declined. As such, they experience much more negative reactions and were more likely to look unfavorably on the company selling the goods and services. What is more concerning for merchants is that 1 in 20 consumers stated that they would actually go as far as deciding not to shop with the vendor again.

“The results send a clear message to the market – British consumers believe that the current online experience requires improvement. To optimise sales, merchants should adopt payment systems that provide the necessary information to give the consumer the optimum online shopping experience. With such a high percentage of consumers reacting negatively to the experience it reiterates the need for merchants to put in place systems to manage a range of challenges that can cause cards to be declined including: cart abandonment, system downtime and just poorly conceived CNP systems,” said Shane Fitzpatrick, President and Managing Director, Chase Paymentech Europe Limited.

“The key to maximising your cart conversion rate is clearly simplicity: a simpler customer journey; a simpler way to authorise card payments; and a simpler, wholly compliant way of managing customer data. Research proves that if declined card payments were dealt with promptly and appropriately consumers would be more likely to return and in today’s competitive e-commerce industry this is how revenue is lost and gained,” concluded Fitzpatrick.

Chase Paymentech assists merchants to reduce the rate of card declines and the complexity associated with online checkout. With a service called ‘In-depth Authorisation’ from Chase Paymentech, the customer doesn’t have to know if their card has been declined. Instead of the customer being asked to re-enter the information, ‘In-depth Authorisation’ allows the merchant to re-submit the authorisation request for specific declines. This keeps the customer at the checkout, increasing the chance of the sale being completed and reducing the chance of brand damage. This is achieved through a series of response codes that provides the merchant with intelligence on what is causing the card rejection. This process allows merchants to better serve customers and remove the distress card decline can cause – which in turn protects the merchants online brand.

*1 The independent survey by Dynamic Markets Limited used a national sample of 2,047 British adult consumers aged 18+ to investigate their experiences during and opinions of CNP payments. All interviews were undertaken independently by Dynamic Markets in early 2010.