_By_ [_Anish J. Sharma, Senior Product Manager_](https://www.linkedin.com/in/anishjsharma/)

Have you ever extended a business trip for a few days and worked remotely out of that new city? Or have you been to a foreign country on vacation? While traveling, many of us have had the frustrating experience of trying to make a purchase online and being declined. Sometimes we’re even prompted to enter a one-time passcode on our mobile devices or email, adding additional steps to the purchase.

But if you’re using a Digital SIM card in another country, you may have trouble receiving those text messages— making it nearly impossible to complete the transaction. This is one example of additional friction in the purchasing process that has downstream effects.

Situations like these are more common than you might think and something we hear about often from the merchants and payment service providers we work with here at Forter.

These false declines can significantly impact revenue for both the merchant and the Payment Service Provider. It’s estimated that, depending on the industry, anywhere [from 30% to 65%](https://www.globalpaymentsintegrated.com/en-us/blog/2021/11/18/bi-weekly-roundup-latest-payments-industry-news-and-trends-november-eighteenth) of all declined transactions are legitimate. Worldwide, this represents over $640 billion in lost revenue for retailers.

Not only do merchants risk losing that individual sale, but they may also lose the customer for life, causing frustration between merchants and their PSPs. If that wasn’t bad enough, PSPs are also losing out on the ability to collect the fees for the declined transaction.

### Why should PSPs care about their approach to fraud

1. **Checkout Friction —** Consumers want a speedy checkout process with few to no barriers to completing their purchase. Adding friction into the funnel to prove their legitimacy can lead to a lost consumer for this specific transaction and life.
2. **Merchant Churn —** Merchants may churn from their current payment provider if they receive too many fraud declines for their customers without solid justification. This issue can intensify for merchants that may already suffer from low sales volume or low margin businesses. Every approved transaction and customer experience matters.
3. **Inability to expand to new verticals —** PSPs struggle to accept merchants in higher risk categories like luxury goods or crypto with a fraud solution geared to decline too many ‘risky’ customers.
4. **Insufficient Analytical and Reporting Capabilities —** A PSP needs to scale and manage a portfolio of thousands of merchants while understanding when a merchant is under a fraud attack, why a transaction has been declined, or if the chargeback ratio has fallen.

### Why are good customers getting blocked?

The travel scenario typically occurs when a merchant or payment processor uses a rules-based fraud solution or relies on a solution baked into their processor. Often, these solutions are too simplistic to register the identity behind the purchase, requiring manual intervention by in-house fraud teams.

### How Forter Can Help

If these problems sound familiar, you might wonder how to improve or select the right fraud solution. Forter’s solution for PSPs supports payment service providers, improving approval rates and reducing fraud instantly for a better customer experience.

Our customers benefit from valuable insights and trends, helping their support teams assist merchants and track down problematic merchants that can cause financial losses. PSPs leveraging Forter create a differentiated experience for their merchants, improving their overall value proposition.

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