Retailers to Miss Out on $700m in Holiday Sales Due to Digital Payment Channels Inefficiencies
Despite economic recovery in the retail sector in 2021, with the National Retail Federation (NRF) forecasting sales up between 10.5% and 13.5% over 2020, merchants are estimated to miss out in almost $700 million in rejected sales on Black Friday and Cyber Monday, reports CMSPI, the global leader in retail payments advisory.
Black Friday and Cyber Monday present an opportunity for retailers to benefit from a significant boost in revenue, but CMSPI expects some erosion due to merchants’ payments set-up.
This Black Friday and Cyber Monday customers will be flocking to online channels for their holiday shopping and are more likely than ever to have their payment methods falsely declined. This occurs when a legitimate transaction is either blocked or labelled as fraudulent, leading customers to try alternative payment methods or abandon the sale altogether, and shop at a different merchant. These lost rejected sales are only compounded during periods of large transaction volume.
A lot goes on behind the scenes once a customer hits ‘pay’ on either their mobile app or website, due to complexities in the payments supply chain. From fraud rules, legacy systems, and lack of communication, many legitimate card transactions are declined. Retailers and payment firms are working together to reduce false declines and increase sales but there’s still work to be done to ensure customers have a seamless shopping experience and merchants recognize all non-fraudulent top line sales.