For retailers, the payment moment in a transaction has become a balancing act between protecting revenue and making it easy for legitimate customers to complete a purchase.
Fraud is evolving, payment preferences are fragmenting, and international expansion adds another layer of complexity. At the same time, every unnecessary decline at checkout risks losing a sale that has already made it through the rest of the customer journey.
Colin Baines, VP of commercial and country manager at WorldPay, stresses that the answer is not simply to add more security checks. Retailers need to use the data they already have to make better decisions about when to approve, when to challenge and how to route a payment.
“The fundamental approach is to employ risk-based authentication to keep good customers moving through the transaction and keep bad actors out,” says Baines.
That is becoming harder as fraudsters become more sophisticated. WorldPay’s research, based on a survey of 1466 payments professionals across major markets including Australia, found that traditional card-not-present fraud remains a significant issue, while pressure is increasingly shifting towards disputes and refund abuse.
“Right now we’re seeing bot-driven credential stuffing feeding and account takeovers as common issues,” Baines says. “Account takeover, refund abuse, and friendly fraud are steadily rising.”
For retailers, the financial impact can extend well beyond the original fraudulent transaction. Refund and dispute abuse can erode revenue and margins, while account takeovers can damage customer relationships.
Security without unnecessary friction
The challenge is that the tools retailers use to combat fraud can themselves affect conversion.
Baines argues that risk-based authentication should distinguish between trusted and higher-risk transactions, rather than applying the same level of friction to everyone.
“Merchants that make use of their data, such as device intelligence, behavioural analytics, and AI-supported risk scoring and fraud solutions, will be better placed to pinpoint issues and reduce revenue loss,” he says.
That data-led approach also matters because fraudsters now have access to increasingly sophisticated tools. “Our research shows that fraud as a percentage of revenue is expected to go up from 2026,” Baines says, pointing to the low-cost or free availability of large language models and other AI tools being used to attempt fraud at scale.
The implication for retailers is that fraud prevention cannot be treated as a one-off technology deployment. The signals used to assess risk need to evolve alongside the behaviour being detected.
The same principle applies to legitimate transactions that are incorrectly rejected. “False declines are a silent revenue killer – small percentage increases in decline rates can have real material impact on revenue,” Baines says.
Retailers can improve acceptance by looking beyond a simple approve-or-decline decision. “Smarter authorisation optimisation – effective routing, controlled retries on soft declines can improve acceptance,” he says.
“These are critical to prevent revenue leakage and dampening effects on conversion rates at a highly critical stage of the funnel – the point of purchase.”
Making every payment decision count
Improving authorisation rates partly depends on understanding which payment route works best for a particular transaction.
“Across issuers and markets, the levers that move approval rates are consistent: network tokenisation and lifecycle management, smart domestic routing by BIN, disciplined soft decline retries, and selective 3DS and exemption use guided by performance data,” Baines says.
But optimisation requires good underlying information. “None of it lands without clean, rich authorisation payloads and ongoing holdout testing to prove lift and keep fraud flat.”
For retailers with repeat customers, tokenisation can also simplify the payment experience. “Tokens and lifecycle updates enable credential management for repeat purchases and improve conversion,” Baines says.
The opportunity becomes particularly relevant when retailers sell across borders. “Pairing network tokenisation with local processing – especially for cross-border shoppers – lifts acceptance.”
Stored credentials can support recurring billing, but Baines says the benefit extends beyond subscriptions.
“For merchants that don’t support recurring billing, stored credentials still speed checkout and enhance the customer experience.”
Global growth requires local thinking
Payment optimisation also becomes more complicated when a retailer enters new markets. A checkout that works well domestically may not translate directly to another country, where customers expect different payment methods, currencies and purchasing conventions.
“Alternative payment methods and multi-currency are often afterthoughts when designing the purchasing journey,” Baines says.
Even relatively basic details can affect the experience. “Considerations of visual cues that indicate payment options, no local currency or language, can be detractors to the purchasing experience.”
The solution is not simply to add more payment methods. Retailers need to consider how payments are routed, how the checkout is presented and how local regulatory requirements are handled.
“Cross-border routing, having domestic acquiring, featuring local methods per market, combined with a locally optimised payment journey are the most critical components to succeeding in other markets,” Baines says.
He also points to an issue retailers can underestimate: “The complexity and challenges in meeting local regulatory and compliance requirements.”
For retailers looking ahead, Baines distils the challenge into three priorities.
“Talk to your payment provider about AI-powered fraud prevention solutions, beyond 3DS, to keep fraud down without adding friction,” he says.
“Second, ensure that you are maximising all opportunities for payments acceptance through data-led optimisation – across channels and markets.”
And third: “Tailor payment options and experiences to local customer needs.”
The underlying message is that payment performance should not be measured purely by fraud rates or checkout conversion in isolation. For retailers, resilience increasingly means managing the two together – using customer and transaction data to protect revenue while removing unnecessary barriers to legitimate purchases.
As payment methods continue to diversify and fraud becomes more adaptive, the retailers best placed to respond will be those treating payments as an active part of the customer experience and commercial strategy, rather than simply the final step in the checkout.
