Peak season is a critical time of the year for merchants. In 2021, Australians spent 18% more on average during peak season than off-season months, resulting in a combined $16 billion in additional sales.¹
Figure 1. Total Holiday vs Non-Holiday Sales 2021²
With Black Friday shopping and the Christmas season in sight, Australian retailers are getting prepared for peak season – but don’t forget, your holiday prep doesn’t stop until checkout. Peak season is make or break for many merchants, but suboptimal payment setups cost merchants billions in lost sales every year from high volumes of false declines, surprise fraud attacks, and sudden system outages. Before turning on the Christmas lights, make sure these key areas of your merchant payment system are optimised.
Stop Your Payments Setup from Turning Away Good Customers
During the holiday season, spirits are high and, with it, so are average transaction values. With an influx of gift shopping and rising basket sizes, fraud detection tools – which are in place to protect merchants from bad actors – can be overreactive or suffer from incomplete data, resulting in an excess of declined transactions from legitimate customers.
Otherwise known as false declines, these issues can take considerable volume away from a merchant’s expected sales revenue and create an extremely frustrating experience for well-intentioned customers, potentially driving these customers to other competitors.
CMSPI estimates that false declines are responsible for up to $3.5 billion in lost sales last year.³ Identifying and resolving these problem areas can improve approval rates, boost sales during this vital period, and maintain customer loyalty to the business.
To learn more about false declines, check out Part 2 of our Fraud Series.
Get Ready For the Latest in Payments Fraud
Fraud security is always important for a merchant’s payment solution, but this year, the risk of fraud may be higher than ever. In the span of a month, three major Australian companies experienced severe data breaches and compromised the sensitive data of millions of Australians⁴, meaning new fraudulent transactions may seem more legitimate than ever.
Fraud can already quite be difficult for merchants to detect. But with certain fraud solutions, merchants can gain access to additional screening tools, secure information storage, data analytics, and chargeback protection to accurately stop fraudulent activity and give merchants some peace of mind this holiday season.
Want to know what fraud solution is best for you? Learn more from Part 1 of our Fraud Series.
Don't Lose Out to Payment Outages
Across Australia’s 34 main service providers, the country experienced around 300+ cumulative hours of outages in the most recent financial quarter, with the longest outage lasting for three days.⁵ Most notably, the Reserve Bank recently suffered an outage that temporarily brought down Australia’s real-time payment system, NPP, and prevented many Australians from receiving expected funds.⁶
Outages can happen for a variety of reasons, but, during the holiday season, an outage can mean entire days of significant lost revenue for a business. To prevent the worst from happening, retailers should proactively communicate with their payment providers, identify a chain of escalation, and find backup solutions in case of a service outage.
Getting Ready for Peak Season
False declines, fraud attacks, and service outages – it’s a merchant’s worst nightmare.
For merchants anticipating the coming months, payment expertise and strategy is the key to a successful peak season this year. Establishing solutions can be quite challenging but with sophisticated tools and expert guidance, there are always ways to accomplish these goals in time for the holiday season.
With $3.5 billion of lost revenue on the line, leading merchants regularly audit their approval rates, fraud solutions, and cost of payment fees. It's crucial that merchants have visibility over their data at the transactional level, access to market-leading benchmarks, and the tools to hold their payment partners accountable.
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- RBA Payments Statistics.
- CMSPI Estimates and Analysis 2021
- RBA Disclosures on Retail Payments Service Reliability Stats.