From machine learning to tokenization, merchants are now using a range of methods to safely improve authorization rates.
In business, no measure of success is more important than the bottom line. So it’s no wonder that the authorization rate is one of the main KPIs for merchants, according to our 2022 Global Fraud and Payments Report.
After all, payment authorization is the foundation of getting paid (payment acceptance being the highest-ranking KPI of all, as you might expect).
Top 10 payment management KPIs, 2022 1
Authorization rates also have a big impact on the overall customer experience. Failed authorizations introduce friction into the payments process and can lead to lost sales and reputational damage.
The question for merchants, therefore, is how to boost authorization rates without opening your business up to fraud risk.
Always have a backup plan
The vast majority of merchants we surveyed (86%) boost their rates by using a range of authorization methods.
Multi-factor authentication (3DS 2) is the most popular method, closely followed by intelligent routing, machine learning, and automated retries for failed payments. The majority of merchants rely on third-party data when using each of these methods.
Most popular techniques for maximizing authorization rates among surveyed merchants 2
More than token gestures
Most merchants we surveyed also use some form of tokenization when processing payments. Here, confidential customer data is encrypted and turned into a secure token. One of the main reasons merchants do this, apart from reducing the risk of data breaches, is to enhance authorization rates.
Verification against a secure token can reduce the need for more time-consuming or intrusive checks.
Key reasons for using tokenization among surveyed merchants 3
However, the benefits of tokenization don’t stop there. It can also be used to create seamless payment experiences across channels and provide merchants with a unified view of their customers. Given its multiple benefits, it should be a fundamental part of any authorization strategy.
Tokenization enables seamless shopping experiences across channels and is a valuable data source for merchants
All the tools you need
If you’re looking to improve your authorization rates, Cybersource’s range of products and services can help you do so simply and safely.
Our Decision Manager tool uses machine learning to automatically review customer behavior, giving merchants peace of mind without slowing down payment journeys.
Meanwhile, our Token Management Service is a great way to unlock the multiple benefits of tokenization and achieve a 360-degree view of your customers.
1 2022 Global Fraud and Payments Survey Report, MRC. Figure 25, p27
2 22022 Global Fraud and Payments Survey Report, MRC. Figure 26, p28
3 2022 Global Fraud and Payments Survey Report, MRC. Figure 27, p29
