Deep Dive: How Retailers Can Reduce Cart Abandonment, Prevent Card Fraud With Digital ID Solutions

Consumers expect to be able to quickly and safely open new digital accounts with frictionless authentication processes, and they are willing to walk away if that is not on offer, according to a recent survey. Nearly 73 percent of respondents considered difficulty opening a new digital account to be a deal breaker with a particular brand or merchant. Consumers in both the U.S. and the U.K. reported little patience for poor onboarding experiences and said they would opt for another service if it did not meet their expectations in this regard. Less than 43 percent were happy with their prior digital experiences in the financial space, while only 37 percent were pleased with their retail-related account opening experiences. Forty-four percent were satisfied with their experiences across all digital marketplaces. 

Respondents nevertheless placed a high priority on security during account opening: 83 percent reported being less likely to abandon the process of an online marketplace requiring real-time identity authentication, and 62 percent would rather have more in-depth identity verification — even if it slows down the process. Up to 52 percent of respondents were willing to provide biometric data, such as facial scans, fingerprints or selfies. Age played a factor in willingness to provide such biometric data, with individuals under the age of 35 being the most willing to offer these details for identity verification. 

These findings suggest that selecting the proper security tools for streamlined account opening processes could only lessen consumers’ abandonment rates. This Deep Dive examines how innovative digital ID verification solutions can not only help retailers reduce cart abandonment but also prevent fraudsters from making off with card information. 

Building Consumer Trust With Digital Identity Verification 

The pressure is on for digital retailers to offer seamless and secure purchasing experiences as consumers spend more time than ever shopping online. Another recent survey of 7,000 North American and European consumers indicated that 92 percent expect digital retail experiences to be fast, frictionless and secure, and 73 percent believe account creation or online transactions should happen instantly. This may explain why 66 percent have relinquished account openings at least once due to friction, such as a long wait time. 

The greater concern for how their personal data is being used is also making consumers demand improved privacy and security protection. The same survey found that 61 percent of respondents believed firms that have access to their information should be responsible for deterring fraud. Allowing a data breach to occur can be the kiss of death when it comes to consumer loyalty, too: 91 percent of those surveyed said they would likely not use a firm again if their data was stolen. 

Over half of survey participants said their trust in a company correlates directly with the degree to which it authenticates identities, but consumers may not realize — or have the patience for — all that it takes to do so. Customers typically undergo digital ID verification when they open accounts or make digital payments, but only 12 percent of survey respondents comprehended the functional role of this process and why it was necessary. 

More retailers are thus looking to make this experience seamless by transitioning from “rules-based systems” to detailed decisioning through machine learning (ML) models that can help them determine risk, significantly diminishing frictions and keeping customer relationships in good standing. 

Reducing Cart Abandonment 

Cart abandonment is a serious problem for online businesses, with some estimates placing the average eCommerce store losses from cart abandonment at 75 percent of their sales. Two studies have shown that the top reason consumers abandon their carts at checkout is the discovery of extra costs, such as for shipping, taxes or fees. One of the studies specified that unexpected shipping costs were the primary reason for cart abandonment for 25 percent of would-be digital buyers. An obvious solution for retailers might be to remove expensive shipping fees, but if this is not possible, they could instead include the shipping charge in the cost of each product itself. Waiving shipping fees for orders that meet a certain purchase price is one common tactic that retailers can employ to keep customers from turning away and even prompt them to add more to their carts, increasing the average order value (AOV). 

The second-most common cause of cart abandonment reported in the latter study was having to create a new user account at checkout, with 22 percent of respondents citing this reason. Offering guest checkout options could help reduce unnecessary frictions for first-time buyers who are uninterested in opening accounts before completing their orders. 

Retailers that invest in innovative tools such as biometrics and ML that can quickly and seamlessly authenticate digital users will have the best chance at creating onboarding experiences that earn customers’ loyalty from the get-go. 

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