Stripe Acquires Touchtech
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Stripe Acquires Touchtech
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Re: Stripe Acquires Touchtech
#2As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Re: Stripe Acquires Touchtech
#3As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.
Re: Stripe Acquires Touchtech
#4As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Reduced fraud does have benefits to merchants either way by (a) less income lost in chargeback fees, and (b) time saved not having to fight chargebacks.
Re: Stripe Acquires Touchtech
#5As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.
Every chargeback from a fraudulent transaction costs ~$25 to businesses.
Re: Stripe Acquires Touchtech
#6As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.
In this case, government regulation makes SCA required; but in Europe most banks already practiced SCA. For free.
Here payment card fees are also far far lower because we don't have a credit card mentality of always seeking that tiny percent cashback, so these are much rarer in Europe. We also have banks themselves competing with Visa and MasterCard, for example in Belgium with bancontact. The banks offer merchants even lower fees for these.
So yes in some worlds the fees are passed down to the consumers. In other worlds, you have the United States.
Re: Stripe Acquires Touchtech
#7As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.
The article mentions "“There was a 25 percent drop in sales overnight when the changes came into effect in India,” he said in an interview. “So we think SCA is a huge deal.".
I highly doubt that 25% is anywhere close to the long-term impact, but any fraud detection that increases friction decreases the number of impulse purchases. If it's not clear that reduced fraud creates a bigger benefit than lost purchases the industry won't implement it. Add the sometimes weird incentives (chargeback fees etc) and something that's beneficial to the consumer might never be implemented willingly by payment providers.
If the friction from better fraud detection reduces impulse purchases it might be detrimental
Re: Stripe Acquires Touchtech
#8As security practices improves, reducing fraud, does the industry reduce its costs and pass the savings to consumers or is the trend to increase their own profits? I have an assumption as to what the answer is, however I'm wondering if anyone here in the industry may have a solid understanding?
Reduced fraud does have benefits to merchants either way by (a) less income lost in chargeback fees, and (b) time saved not having to fight chargebacks.
There's more to that. Anti-fraud mechanisms that require additional action on user's side, lower the conversion rate.
For example 3DSecure mechanism redirects customer to another site where user has to put a number received in a text message. My phone is in another room upstairs. I cancel the payment and tell myself I'll do it later. Of course I might do it, but I might forget about it or change my mind.
Another example: (in Europe) from time to time, when making a transfer/payment, I have to generate an OTP using a physical device that I received from my bank. I find it extremely irritating, and I don't take this device with me everywhere, so if I'm making a payment and I'm expected to use this device, I cancel the payment.
I've worked in a place where we introduced 3DSecure mechanism for our payments, and in certain countries it dropped conversion rate while in others (where people are used to such mechanisms) it remained the same
Re: Stripe Acquires Touchtech
#9Earlier quoted context omitted.
Is reduced fraud even creating meaningful savings? The simple fact that these changes are driven by government regulation rather than internal efforts makes me think not. I think the main benefit to consumers is that they don't have to deal with identity theft as often.
The article mentions "“There was a 25 percent drop in sales overnight when the changes came into effect in India,” he said in an interview. “So we think SCA is a huge deal.". I highly doubt that 25% is anywhere close to the long-term impact, but any fraud detection that increases friction decreases the number of impulse purchases. If it's not clear that reduced fraud creates a bigger benefit than lost purchases the i…
because it was very unreliable in India. In Europe it works really well.
Re: Stripe Acquires Touchtech
#10Earlier quoted context omitted.
Reduced fraud does have benefits to merchants either way by (a) less income lost in chargeback fees, and (b) time saved not having to fight chargebacks.
There's more to that. Anti-fraud mechanisms that require additional action on user's side, lower the conversion rate. For example 3DSecure mechanism redirects customer to another site where user has to put a number received in a text message. My phone is in another room upstairs. I cancel the payment and tell myself I'll do it later. Of course I might do it, but I might forget about it or change my mind. Another exam…
Yeah 3dsecure is a pretty big hit to conversion rates.
It kind of stinks being a vendor. Stripe charges extra for certain security pre-cautions but it doesn't do a great job at protecting against fraud on its own, where as 3dsecure does do a great job but it kills conversion rates since it's something a consumer will see.
In the end, it's the seller that ends up having to pay the price. Either through fees for disputes (which are very expensive, it's $15 per dispute) or having to pay for extra passive services, or lowering conversion rates with 3dsecure or requesting a ton of info to help reduce fraud (full address, etc.) for a digital product that won't be shipped anywhere. That raises suspicion from the consumer and it's a lot more fields to fill out -- plus it's not a sure fire way to prevent fraud.