Why Transaction Transparency is the Future of Digital Banking

Consumers today expect to have all sorts of personal financial information at their fingertips. In fact, a recent Ethoca and Aite Group research report shares findings on why transaction transparency – giving cardholders more specific details about each of their purchases – is critical to the future of digital banking. 
 
The report explores how these details can help issuers and merchants reduce the high cost of chargebacks, shave overhead costs and also improve the customer experience. The study found that 72% of consumers check their financial service providers’ website or mobile app at least once a month. As consumers continue to embrace digital channels, here are three key reasons merchants and issuers should embrace transaction transparency! 

1. Greatly improve the customer experience – and allow customers to self-serve.

A survey of more than 1,000 consumers found that 96% of cardholders were interested in having more details about their debit card charges – with 63% being “very interested.”
 
Moreover, consumers have shown great interest in doing their own research when they spot an inaccuracy on their payment card statements, according to the study. Providing enhanced transaction details on digital statements, such as an identifiable merchant name or a purchase description, can enable self-service by helping the cardholder recognise the transaction, whether they or someone else in their household made it.
 
“It is more important than ever for issuers to be able to facilitate user-friendly self-service capabilities,” Aite Group’s Julie Conroy, co-author of the report, said in a news release.
 
The features identified as being most valuable for helping providing transaction clarity include: 

• A picture of the printed receipt
• The date and location of delivery for online purchases
• A full list of products purchased
• A link to refund and return details for the purchase

2. Significantly reduce disputes, chargebacks and false claims.

Likewise, providing enhanced transaction details reduces some major costs for both issuers and merchants. When cardholders can quickly and easily determine that a charge is legitimate – because, say, they recognise the merchant’s name, the items purchased or the exact date and time of purchase – they are less likely to dispute a legitimate charge. Cardholders disputing legitimate charges is a significant and growing problem, known as friendly fraud, and in some industries such as digital goods, friendly fraud can comprise 80% or more of all disputes.
 
According to the research, the top reason that cardholders dispute a transaction is due to not recognising it or being confused with the transaction description provided by the seller – with about half of all cardholders saying that was the reason they disputed a charge over the past year.
 
The chargeback process is time-intensive and costly. One large merchant interviewed in the report said it was able to prevent 65% of all disputes from becoming chargebacks among issuers that provided detailed transaction information to their customers.  

3. Positively impact an issuer’s operations.

Issuers’ call centers and customer service representatives spend a lot of time fielding calls from cardholders who want to investigate a transaction shown on their card statement or dispute a charge. Providing better transaction details on card statements leads to fewer such calls, since cardholders can more easily recognise their purchase details (and are less likely to mistakenly dispute charges as fraud).
 
The study found that providing additional transaction clarity could reduce call volume by 25% in cases where the description of the purchase was unclear. 

Achieving Transaction Transparency Through Collaboration

As the research findings show, providing customers with transaction transparency is what cardholders want and supports a better customer experience. But that doesn’t have to be the “future,” – in fact, it’s fully achievable today. Collaborative solutions that rely on a network of merchants and issuers provide cardholders with an enhanced digital solution and better customer experience today by providing them with far greater detail into their card purchases – reducing the odds those purchases will result in false claims while avoiding the whole chargeback ordeal.
 
To download a copy of the full Ethoca and Aite Group report, on how transaction transparency can enhance digital banking, click here.