Cyber Monday Essentials: Optimizing Payment Authorization to Prevent Fraud

Cyber Monday has become a cornerstone of the holiday shopping season, with millions of consumers flocking online to snag the best deals. In 2024, U.S. shoppers spent a record $13.3 billion online on Cyber Monday alone, up 7.3% from the previous year, making it the largest e-commerce day in history. Globally, Cyber Monday generated $49.7 billion in online sales, highlighting its worldwide reach and significance.

The term "Cyber Monday" was coined in 2005 by the National Retail Federation to encourage people to shop online on the Monday after Thanksgiving. 

It quickly gained popularity as consumers embraced the convenience of online shopping, leading to significant increases in sales each year. Last year, online shopping on Cyber Monday outnumbered in-store shopping by nearly 3 to 1, with 64.4 million online shoppers compared to 23.2 million in-store.

While it offers incredible opportunities for businesses to boost their sales, Cyber Monday also presents significant challenges in terms of authorization and security. 

As online traffic surges, especially during peak hours, when spending hits $15.8 million per minute between 8 and 10 PM EST, so does the risk of fraud and cyber threats. Addressing these issues with effective strategies is crucial to ensuring a seamless and secure shopping experience.

The importance of authorization optimization

Authorization optimization refers to streamlining the process through which transactions are approved or denied. On Cyber Monday, the sheer volume of transactions can overwhelm systems, leading to delays, false declines, or worse, security breaches. 

For context, 57% of all 2024 sales were made via mobile devices ($7.6 billion), and nearly $1 billion in purchases used buy-now-pay-later options. This shift toward mobile and alternative payment methods increases both opportunity and complexity for fraud prevention.

To combat these issues, businesses can take several steps:

• Evaluate your payment gateways: Ensure that your payment gateways are equipped to handle increased traffic. They should have robust fraud detection systems to minimize unauthorized transactions.
• Implement strong customer authentication (SCA): By requiring additional verification steps, such as biometric checks or two-factor authentication, you can significantly reduce fraud while maintaining a smooth customer experience.
• Monitor transactions in real-time: Utilize real-time analytics to flag suspicious activities. This allows you to respond swiftly to potential threats.

Shane Estes, Vice President and Head of Sales at Inovio, highlights the significance of this aspect, "On days like Cyber Monday, optimizing your authorization process is not just about preventing fraud; it's about ensuring that legitimate customers aren't wrongly turned away, which can severely impact sales and customer satisfaction."

Enhancing security measures

Security is paramount on Cyber Monday. The influx of online shoppers creates a lucrative target for cybercriminals. Here are some actionable tips for bolstering your security:

• Update software regularly: Ensure that all systems and applications are up-to-date with the latest security patches to protect against known vulnerabilities.
• Educate your team: Make sure your staff is aware of common cyber threats and knows how to recognize phishing attempts or suspicious activities.
• Use encryption: Encrypt sensitive data such as customer payment information to protect it from unauthorized access.

Cyber Monday is not just an opportunity for increased sales. It is a challenge that requires careful planning and robust security measures. 

By optimizing authorization processes and enhancing your security strategy, you can provide a safe and efficient shopping experience for your customers.