Payment security is key to gaining consumer loyalty in the MENA region – My Startup World

The adoption of digital commerce in the MENA region has grown rapidly over the past few years. Countries that were once heavily tied to cash and physical transactions have reached digital maturity in just a few years. According to Checkout.com’s fourth annual MENA e-commerce report, The State of Digital Commerce in MENA 2024, 91% of consumers in the region reported making e-commerce purchases in the past two years. The number of people shopping online in MENA at least once a day has increased by 80% since 2020, with the Kingdom of Saudi Arabia leading the way with an astonishing 90% increase.

In response to changing consumer demands, merchants across the MENA region are embarking on ambitious digitalization journeys and adopting innovative payment strategies. As digital commerce moves beyond the early adoption phase, the focus is shifting toward fine-tuning performance. As such, strengthening payment security has become a top priority.

As innovation drives progress in the payments industry, fraudsters aren’t resting on their laurels, further refining their own fraud methods and tricks. What’s more, the same aspects of e-commerce that make it appealing to consumers—speed, convenience, and anonymity—also work to the advantage of cybercriminals. Because the e-commerce ecosystem involves multiple stakeholders—the retailer, the customer, the processor, and the network—fraudsters have many potential entry points they can exploit.

According to Remo Giovanni Abbondandolo, MENA CEO at Checkout.com, e-commerce fraud can take many forms, such as criminals using stolen credit card numbers to make purchases, transaction replay, and chargeback fraud. The diverse and complex nature of e-commerce fraud underscores the importance of vigilance and safe practices that merchants must adopt to avoid such incidents.

But it’s not just the initial financial loss that should worry merchants. Falling victim to e-commerce fraud can damage customer trust and a company’s reputation. Alarmingly, 33% of MENA consumers say they have been a victim of payment fraud. According to The State of Digital Commerce in MENA 2024, safe and secure payments are now a priority for 39% of MENA consumers. In 2020, respondents to the survey placed the highest value on fast delivery.

What’s more, a whopping 30% of shoppers said a single false decline—when a payment is declined even though the recipient has sufficient funds in their account—would lead them to shop at a competitor. As customer acquisition costs for e-commerce merchants continue to rise, the rise in false declines is just an insult. This makes high-performing acceptance solutions of great competitive importance in the MENA region.

It’s worth mentioning here that this region continues to see a relatively high number of false declines. According to a recent report by Checkout.com, 23% of respondents have experienced a false decline in recent months. In today’s rapidly evolving digital economy, consumers are also less patient, less loyal, and more savvy than before.

Buyers want to be sure that their payments are handled by a safe and reliable partner. The good news for merchants is that strengthening payment security is a much simpler task than dealing with widespread data breaches.

Against this backdrop, Abbondandolo outlines effective strategies that merchants in the MENA region can adopt to minimize payment fraud and false declines, thereby increasing consumer trust and loyalty.

Choose a trusted partner
Partnering with a regulated payment service provider (PSP) that offers acquisition capabilities, advanced technology support and comprehensive regional regulatory expertise can significantly strengthen a company’s fraud protection measures. Regulated PSPs provide acceptance solutions that streamline payment processes through optimized messaging, routing and retries, ensuring robust security and seamless transactions. Additionally, because fraudsters know no borders, partnering with a regulated global PSP with local experience offers advanced technology solutions that include real-time fraud detection systems that are trained to detect the most advanced global frauds and techniques. By analyzing transaction data in milliseconds, they identify suspicious patterns and behaviors that may indicate fraudulent activity.

By partnering with a regulated Payment Service Provider (PSP) that offers transaction capabilities and advanced technology support, businesses can benefit from a comprehensive approach to fraud prevention and payment security.

Harness the power of built-in AI
Regional merchants are increasingly using a combination of tools and machine learning to protect their businesses from fraud. Advanced payment technology allows merchants to seamlessly integrate fraud detection solutions into their platforms without any additional configuration. Meanwhile, AI is now trained on billions of global transactions, and merchants benefit from a global network effect that allows them to analyze massive amounts of data to detect patterns, anomalies, and emerging fraud like never before.

Minimizing fraud and improving payment processing efficiency are closely related goals that can significantly impact a company’s bottom line and customer satisfaction. When a company effectively reduces fraud, it tends to experience several simultaneous benefits that contribute to overall improved performance.

Our merchants across the region are experiencing a whole new level of payment efficiency with Intelligent Acceptance. This product combines advanced AI and machine learning, massive network data, and deep payment expertise to drive conversions and unlock untapped revenue. We’ve already recovered $1.1 billion in revenue and increased acceptance rates by an average of 2% globally.

Use data in your work
Research conducted by Checkout.com in conjunction with Oxford Economics found that $50.7 billion has been lost in recent years due to fraudulent declines. Big data can enable merchants to track and respond to customer payment trends with laser-like precision in real time. Here, we’ve seen huge benefits from Intelligent Acceptance, which draws insights from these data sets to deliver a whole new level of payment efficiency, increasing conversions and unlocking untapped revenue, and Network Tokens, which have helped our merchants achieve higher authorization rates, reduce fraud, and enable businesses to offer improved customer experiences while preserving customer data.

Looking ahead, half of all MENA shoppers anticipate an increase in online spending over the next 12 months. Abbondandolo believes there is still significant untapped opportunity for MENA merchants to combat fraud, reduce false declines and overall payment costs, while also increasing revenue. As consumers increasingly embrace digital shopping and payments, optimizing every aspect of the e-commerce experience remains crucial for merchants to capitalize on this growing trend.