The Challenge of Establishing Trust in the Age of Anonymous Commerce

“Trust, in the digital age,” Doriel Abrahams, head of risk in the U.S. at Forter, told PYMNTS, “is a lot different than it used to be.”

Gone are the days where commerce was done in person, where someone behind the counter knew you and your family, so you could put things on the tab.

With the anonymity that comes with digital transactions, where there may be no such familiarity in the mix, and a customer may appear sporadically (or maybe even once), trust is a critical component for merchants. This is also true for consumers, as they visit websites and must trust merchants to keep their data, and their payments, safe.

“When you are buying something online, you need to know that you’re going to receive it. You need to know that someone can back up whatever you’re seeing on the web page. The retailers have to trust the consumers to actually be ‘good’ for the payment they’re making,” he said.

The Key Currency

“Trust is the currency between consumers and retailers,” said Abrahams. Forter’s own findings, he said, are that consumers are willing to spend 46% more with retailers that they trust — and that trust them. The percentage soars to 60% more among U.S. consumers.

There are, of course, different ways for merchants to show trust — or lack thereof. Consider the case where a consumer’s card is declined, or friction is in the mix, as there may be stepped-up authentication protocols introduced before a transaction proceeds. Consumers may be frustrated as they’re sent texts or other prompts to authenticate themselves.

The impact can be significant. Abrahams said 75% of consumers surveyed by his firm have said that they will abandon a purchase if they find that checkout processes are too-time consuming or prove to be unwieldy.

Separate research from PYMNTS Intelligence underscores the importance of a smooth checkout experience — 67% of consumers say that a friction-free experience is “very or extremely influential” in determining whether they’d shop with a merchant again.

“At the end of the day, we’re all kind of losing here because the consumer did not get the experience that they were opting in for. And the retailer definitely is not optimizing their potential revenues,” said Abrahams.

Merchants, he said, can show trust in their consumers by offering easy checkout processes, and a broad range of payment options.

“For forward thinking merchants,” he said, “you are essentially gaining a lot more lifetime value of a specific consumer.” Repeat business, he said, boosts top lines without necessitating additional customer acquisition costs.

“We all have our favorite go-to stores to buy whatever it is we’re buying online,” said Abrahams, who added, “it’s always for a reason — and we’re rewarding them for trusting us by returning to purchase more items.” The trust factor goes beyond the purchase itself, said Abrahams, who added that the individual who does not get what they ordered in a timely manner will be disenchanted with the merchant, and may even initiate a chargeback or dispute, or call in to a call center, which costs the customer time and the retailer money.

“It’s very unlikely that a consumer would return after a bad experience,” he said, “given the fact that there are so many other places you can go to shop online to buy the exact same item.”

Data and analytics, he said, and insight into “good” consumer behavior, can help merchants make better-informed risk decisions, especially with younger generations where so much of their data may be crossing the web as they live online — and as Abrahams noted, these younger consumers have been hit by data breaches far more often that their older counterparts. Millennials and Gen Z consumers are up to four times more likely to be falsely declined at checkout, too, said Abrahams.

But those same younger consumers can pay dividends — in the form of long-lived relationships and increased sales with their trusted merchants. Abrahams warned against adopting blanket fraud rules that might keep good customers from transacting. Leveraging several data points and analyzing behaviors across platforms (including Forter’s) can be the keys to taking calculated risks.

“Checkout, opening an account with your site, someone logging in, someone changing the payment method … all of these checkpoints are a valid place to generate that trust,” said Abrahams.