Deciding to expand into new markets is complex and goes well beyond simply trying to increase sales. The challenges are especially true for online merchants who must extensively evaluate the advantages against the associated risks and challenges of launching outside their domestic market. Allowing any customer with internet access to engage with a brand is incredibly powerful, but opening the metaphorical doors of an ecommerce business internationally comes with a unique set of challenges.
In particular, it’s important to consider how your fraud prevention team will adjust to the influx of orders that bring additional complexity: How do you begin to piece together a customer’s story when you receive an order from an unfamiliar location? How can you evaluate the validity of an order when you have no reference point?
Global order review requires local expertise
At Riskified, we know firsthand that it takes time and effort to develop expertise in fraud and risk management across the hundreds of countries around the globe. To truly become an expert requires in-depth analysis and knowledge of a variety of data points, like cyber culture, traditional naming practices, and geolocation in a particular region. Popular free email services and social networks vary by country and are crucial data sources to consider when verifying a transaction’s validity. It also takes cultural literacy and a working knowledge of local and regional geography, like suburbs of major cities or alternate city names and address formats, to thoroughly research an order. Access to third-party data sources is another important resource that is useful when confirming a customer’s identity, though subscribing to a data source for every country can quickly become costly, time consuming, and complicated from a technical standpoint, if it necessitates integration with a store’s backend system.
Language expertise and time difference are two other obstacles that prolong the international order review process. Language barriers inhibit merchant staff from effectively communicating with customers, and time difference can lead to a lag in response time and slow down the order review process overall. Also, the order data available varies by country. For example, if a US-based merchant decides to expand to Australia, they need to consider the fact that AVS information is not available in Australia due to local regulation. If AVS matching is core to your US order review process, the lack of this information will make the approval process nearly impossible for orders from Australia.
Because of data issues unique to international orders, automatic review tools often have difficulty processing these orders. As a result, a disproportionate number of international orders are flagged for manual review, requiring that more staff hours be dedicated to the review process. Relying on staff to manually review and verify orders can be time consuming, inefficient, and it can drain resources from other parts of the business.
The Takeaway: Expanding to new markets isn’t as scary as it seems
Many factors contribute to the decision to expand to overseas markets: the increased complication of coordinating logistics overseas, development of a culturally-relevant international brand, and dedication of resources to marketing. Identifying and preventing fraud, however, should not be one of them.
At Riskified, we’ve been able to help many companies including Stubbs & Wooton, expand their reach internationally. Stubbs used to decline nearly all international orders because their team lacked the resources and language expertise needed to verify international orders. They now send all international orders to Riskified, and since, their international sales grew from 2 to 10 percent of all sales. International orders now account for 9 percent of their revenue, and order review time has decreased by 89 percent.