Online retailers suffered a loss of nearly USD 20 billion due to failed online transactions and falsely rejected payments in 2019, a study conducted by Checkout revealed.
According to the report, merchants lost nearly USD 13 billion last year as customers got frustrated over falsely rejected payments. These false transactions often get flagged as false declines, resulting in monetary loss to retailers.
Furthermore, online retailers lost an additional USD 7.5 billion of consumer money due to unfulfilled digital transactions, reported TechRadar, citing the Checkout study.
The study was conducted on 5,000 consumers and 1,500 merchants across the US, the UK, France and Germany. Its findings show that the US was the worst hit, losing USD 15 billion last year to false declines, followed by the UK (USD 2.3 billion), Germany (USD 1.7billion) and France (USD 1.3 billion).
The study also found that despite the pandemic, the volume of online payments is growing as consumer habits change, due in part to the pandemic. Checkout saw a 250 percent increase in online transaction volume in May year on year.
While merchants have been using online payment methods for consumer transactions, the study found out that more than 65 percent of merchants do not receive the granular data that tells them when, why and how customer payments have been declined, stopping them from even beginning to address their payment inefficiencies.
Lack of payment options is also seen as a barrier for consumers. The study states that 56 percent of shoppers suggested taking their money elsewhere if the merchant did not offer their preferred payment method.The study also highlighted that while online customers want efficiency when it comes to payment processes, they put a high priority on security too. In fact, the research shows that people are willing to pay more for better security than they are for convenience.