CASE STUDY

PSP SUCCESS: ENABLING A THREEFOLD CROSS-BORDER CONVERSION RATE INCREASE

The challenges facing PSPs, and by extension,

their merchant customers, are easy enough to describe.

But uncovering the root causes and implementing an

action plan is easier said than done. However, with

support from an experienced payments provider such

as ACI, PSPs can deliver significant improvements

in conversion rates for their merchants.

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PSP SUCCESS: ENABLING A THREEFOLD CROSS-BORDER CONVERSION RATE INCREASE

Figure 1 Solving the 3-D Secure challenge made a substantial impact on the conversion rate.

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Merchants instructed to

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2015

CHALLENGE 1 AN IMPROPER 3-D SECURE SETUP BLOCKS FRAUD AND GENUINE PURCHASES

THE SETUP

One of ACI’s payment service provider (PSP) clients launched a new cross-border eCommerce solution for merchants looking to sell in Asia, Australia, Africa, Europe, North America and South America. As an ACI client, the PSP’s merchants had access to the full range of ACI’s tools for increasing the conversion rate. However, not long after the solution’s launch theconversion rates were stubbornly low, around 23%(a good conversion rate should be over 50%), despiteguidance from the PSP.

The PSP then approached ACI for assistance improvingits merchants’ conversion rates. ACI payment expertscoordinated closely with the PSP to first understandthe causes behind the low conversion rates and thendevise solutions to solve the problem.

The experts’ investigation made it quickly clear thatthe problems arose from the PSP and merchants’unfamiliarity with the countries they had expanded into.The merchants were attempting to replicate what hadworked in their home market, when conditions dictatedunique strategies.

After assessing the situation, ACI’s experts uncoveredfour major issues negatively a�ecting the conversionrate: an overly stringent 3-D Secure setup, merchantsincorrectly using payment data fields for internalpurchase reference information, failing to validate databefore it was sent to the acquirer and an inadequateCSC setup. By taking action to correct each of theseissues, ACI’s guidance helped the PSP’s merchantsvastly improve conversion rates.

3-D Secure is an e�ective tool to block fraud. Thetwo-step verification process ensures only genuinecardholders can complete a credit card sale. The factthat most major card brands have their own version —Verified by Visa, Mastercard Secure Code, AmericanExpress SafeKey, Diners ProtectBuy and JCBJ/Secure — testifies to the tool’s e�cacy. Yet whenimplemented incorrectly it can cause problems, as wasthe case for many of the PSP’s merchants selling cross-border into Brazil. The tool is virtually unknown toBrazilian shoppers and when they encountered the 3-DSecure page the majority abandoned their shoppingcarts.

To overcome this problem, the PSP instructedmerchants to use shoppers’ BIN numbers toautomatically identify Brazilian cards and bypass3-D Secure in those instances. The change, onceimplemented, immediately raised the PSP’s merchants' overall conversion rate from 23% to 53%.

CONVERSION RATE

PSP SUCCESS: ENABLING A THREEFOLD CROSS-BORDER CONVERSION RATE INCREASE

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Figure 2 Solving Challenge 2 provided an uptick in the conversion rate.

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Merchants directed to

cease improper use of payment

data fields

2015

Figure 3 Fixing Challenge 3 resulted in a further rise in the conversion rate.

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Merchants stop forcing CSC use on

unaccustomed shoppers.

2015

CHALLENGE 2 MERCHANTS TRIGGER FRAUD ALERTS BY MISUSING DATA FIELDS

CHALLENGE 3 OVERRELIANCE ON CARD SECURITY CODES DISRUPTSAUTHENTIC SALES

The payments data shoppers enter is only part ofwhat acquirers and fraud prevention providers useto determine a transaction’s legitimacy. Merchantscan also add data to a transaction. Investigations byACI’s payment experts uncovered a common issueamong the PSP’s clients: many were automating datafields, such as empty slots in the billing address, withinternal reference tags. The unfortunate side e�ectof this practice was that it caused the merchants’acquirers and fraud prevention providers to frequentlyblock transactions because of data discrepancies. Bydirecting o�ending merchants to cease automatingthese types of data fields, the PSP's merchants' conversion rate increased from 53% to 56%.

Card security codes (CSCs, also known as cardverification codes or CVVs), are the three-digit codeson the back of credit cards. They are a security featurebuilt especially for card-not-present transactions.Requiring shoppers to input a CSC almost alwaysdeters fraud without harming conversion rates.

However, many shoppers in South America wereunaccustomed to entering CSC details. Thus, manyshoppers either mis-entered CSC data and had theirpayments rejected or abandoned their shopping cartswhen prompted to enter a CSC. Therefore, the PSPadvised its merchants to deactivate the use of CSCsin several South American countries. As a result ofthe new strategy, the PSP’s merchants’ overall conversion rate improved from 56% to 60%.

CONVERSION RATE

CONVERSION RATE

PSP SUCCESS: ENABLING A THREEFOLD CROSS-BORDER CONVERSION RATE INCREASE

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Figure 4 Immediate data validation brought conversion rates up further.

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Merchants instructed to pre-validate

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2015

Figure 5 Conversion rates grew while rejections by acquirers and fraud management consistently dropped.

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Conversion rate

Rejections by fraud prevention provider

Rejections by acquirer

CHALLENGE 4 INVALID DATA CAUSES THE ACQUIRING BANK TO REJECT MANY TRANSACTIONS

FINAL RESULT DEFTLY UTILIZE THE TOOLS FOR IMMEDIATE IMPROVEMENT

It is common for shoppers to mis-enter payments databecause card numbers are long. Unfortunately, evenminor mistakes can result in a rejected payment. Andonce rejected, many shoppers are discouraged and donot try again, instead abandoning their shopping cart.

ACI discovered this was a common problem forthe PSP’s merchants: shoppers’ incorrect data wassubmitted to acquirers and, predictably, rejected. Thefix: the PSP encouraged merchants to utilize ACI’s datavalidation tool that, before sending data to the acquirer,checked for errors. The system then alerted shoppersto errors, allowing them to make changes beforeultimately submitting the payments. As a result, thePSP's merchants' overall exchange rate improved from 60% to 71%.

The problems the PSP and its merchants faced in theircross-border endeavors are common when expandinginto relatively unfamiliar new markets. Every merchanthad the tools needed to achieve a high conversionrate in every country, they only lacked a coherent andspecific strategy to deal with the various situations.ACI’s expert guidance helped the PSP identify theproblems and direct the merchants to take preciseaction using ACI tools, ultimately raising the overallconversion rate from 23% to nearly 72%.

CONVERSION RATE

PSP SUCCESS: ENABLING A THREEFOLD CROSS-BORDER CONVERSION RATE INCREASE

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CONTACT US AT merchantpayments@aciworldwide.com

WANT TO DRIVE HIGHER CONVERSION RATES FOR YOUR MERCHANTS? Speak to one of our cross-border payment experts.

ACI Worldwide, the Universal Payments® (UP®) company, powers electronic payments for more than 6,000 organizations around the world. More than 1,000 of the largest financial institutions and intermediaries, as well as thousands of global merchants, rely on ACI to execute $14 trillion each day in payments and securities. In addition, myriad organizations utilize our electronic bill presentment and payment services. Through our comprehensive suite of software solutions delivered on customers’ premises or through ACI’s private cloud, we provide real-time, immediate payments capabilities and enable the industry’s most complete omni-channel payments experience.

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