Protecting your cardholders from fraud is a good thing. But too much of a good thing can hurt your business.
59% of millennials say that they would be very or somewhat likely to leave their financial institution due to a credit card false decline.
Imagine being a cardholder. You're in the checkout line at a grocery store out of town. You're buying groceries for a week's vacation. Six people are behind you. You go to swipe your card and it's declined. Why? Your card has been compromised? No. You forgot to tell your financial institution (FI) you were going out of town? Yes.
Now you have to call the FI and straighten things out. Or you put that card away and use another one. Either way, it's inconvenient and embarrassing.
According to Aite Group1, "59% of millennials say that they would be very or somewhat likely to leave their financial institution due to a credit card false decline." Additionally, the time and expense involved for a financial institution's staff to deal with a false decline, not to mention the lost sales and associated fees can be staggering. In 2014, U.S. false declines amounted to $118 billion2 loss of value or roughly $1.9 billion interchange revenue loss.
A proactive approach
The reasons for a false decline typically include location, frequency of use, merchant type and transaction amount that are based on sophisticated algorithms that can lack real-time context of the card user behavior. The Ondot mobile application smartens these algorithms with real time context, by cardholder participation. The cardholders provide valuable and real-time insights into their usage intent when they set card & location parameters, the combination of the two, results in significant reduction in false declines.
The card mobile application becomes an invaluable aid in automatically confirming current and future authorized use. For example, location-aware controls follow cardholders wherever they go and upcoming travel locations with date of travel can be established –all with simple finger swipes in the mobile app, significantly reducing the false declines and at the same time strengthening fraud capabilities with transactions denied outside the cardholder's established operating area. Cardholders feel secure both in terms of fraudulent misuse and knowing that their card will go through. Financial Institutions benefit from increased usage and reduction in fraud.
The Ondot mobile solution has helped institutions such as yours reduce false declines by 16% and achieve superior customer experience, ongoing customer loyalty, and reduction in service costs.
Learn more about how we help your institution with false declines by contacting your Ondot sales representative.