Context
In the competitive e-commerce landscape, optimizing the payment process is crucial for success. A European e-commerce company operating primarily in the US market faced challenges with a high rate of failed transactions, potentially impacting sales and customer satisfaction.
Problem Identification and Consequences
Our analysis revealed a 6% failed transaction rate, significantly higher than industry standards. The root cause was identified as the 3D Secure authentication step, which is widely adopted in Europe but less embraced in the US market. This mismatch between security measures and market expectations led to:
- Increased cart abandonment due to a complicated checkout process
- Potential loss of sales and revenue
- Diminished customer trust and satisfaction
So our goal was to balance robust fraud protection with a seamless user experience tailored to the US market preferences.
Solution Implementation
To address this issue, we implemented a data-driven approach:
- Thorough analysis of the problem, including discussions with stakeholders and US market clients
- Hypothesis formation: Removing the 3D Secure challenge could reduce failed transactions without significantly increasing fraud risk
- A/B testing implementation:
- Control group: Existing authentication process with 3D Secure
- Experimental group: 3D Secure authentication step removed
- 30-day test period with close monitoring of key metrics, focusing on sales performance
Business and Product Gains
The A/B test results exceeded expectations:
- Failed transactions dropped from 6% (control group) to 0.8% (experimental group)
- Significantly improved user experience with a more streamlined checkout process
- Increased conversion rates and completed purchases
- Demonstrated adaptability to specific market needs, enhancing the company's competitiveness in the US market
Based on these positive outcomes, the company fully implemented the change, removing the 3D Secure step for all US market transactions. This data-driven approach not only solved the immediate problem of high failed transactions but also positioned the company for continued growth in the US e-commerce market.
