Ingenico Payment Services, leading payment expert within the Airline and Travel Industry, and Airline Information today revealed the findings of a study of over 4,500 Airline & Travel online stores. Key findings include:
- Adoption of 3-D Secure heavily varies depending on regions and countries.
- 53% of Airline & Travel companies use 3-D Secure in a selective manner:
46% of these merchants activate 3-D Secure based on real-time risk assessment, while 54% activate 3-D Secure based on card country.
Infographic: 3-D Secure 2014 benchmarking study for Airline & Travel Industry
Most Airlines and Travel online stores use 3-D Secure in a selective manner to tackle online fraud and increase their revenues
The Airline & Travel Industry relies on its online channels to generate revenues. Compared to other industries, the average basket value is very high, making it an attractive target for fraudsters. It is therefore essential for merchants in this industry to choose the best use of all relevant fraud prevention solutions, including 3-D Secure authentication.
The study shows the disparities in the use and adoption of 3-D Secure around the world. While in some countries such as The Netherlands or the United Arab Emirates more than 60% of card transactions go through the 3-D Secure authentication process, less than 5% go through this same process in the United States, Brazil or Mexico.
Key findings also reveal significant highlights and lowlights reported by businesses using 3-D Secure: while 49% of informed respondents report a decrease of more than 50% of chargebacks when they use 3-D Secure, 61% see an increase of more than 10% of their drop-off rates.
This explains why most businesses use 3-D Secure in a flexible manner. 31% of online merchants use 3-D Secure all the time, 53% use it flexibly and 16% of them do not use 3-D Secure. Among those using 3-D Secure selectively, 46% request 3-D Secure authentication based on a risk score, and 54% based on card country. Objective for businesses is to get the benefits of 3-D Secure while mitigating the negative impacts.
“The purpose of this study was to give Arline and Travel e-businesses a better view of common practices and usages of 3-D Secure”, explains Ludovic Houri, VP Product & Payments at Ingenico Payment Services. “The challenge for these businesses is to define which combination of fraud prevention solutions should be used to optimize their fraud-conversion balance, based on the payment context. As the study points out, 3-D Secure is not enough to tackle online fraud but helps mitigating risk in certain cases, specifically when combined with a transaction risk analysis tool”.
We worked with Ingenico Payment Services to conduct the 3-D Secure survey because network airlines have an average profit margin of 2% in a good financial year. Getting a handle on online fraud goes a long way to increase this margin and enabling the airline industry to remain sustainably profitable”, explains Christopher Staab, Managing Partner at Airline Information.
To better understand 3-D Secure adoption and practices according to country, merchant location and business type, a total of 106 merchants responded to the survey, and over 38 million transactions made between January 1 and November 15 2014 were reviewed, covering 4601 Airline & Travel industry online stores