Digital transformation can be described as the way a business integrates digital technology in order to change how they operate. Previously, effectively implementing a technology-driven strategy would take several months to years. However, with the event of the global pandemic, businesses have ramped up the speed at which they are adopting the latest trends related to digital transformation.
One study estimates that spending on technologies related to digital transformation is expected to reach around $1.8 trillion by the end of 2022. If a business would like to emphasize spending on rapid digital transformation, what technologies should they invest in? Below we cover some top trends.
IoT and 5G
5G is regarded as the 5th generation technology for mobile networks. The primary characteristics of the 5G technology include low latency, multi-peak data speeds, improved connectivity, better user experiences, better network bandwidth, and greater availability.
When combined with edge computing, 5G is capable of high-end innovations for leading technologies such as Artificial Intelligence, video inspections, and drone-initiated inspections. These help in automating day-to-day tasks while averting network issues. Some common uses of 5G technology in the IoT industry are:
Connected automobiles
Shipping and logistics
Remote healthcare
Software 2.0
This revolutionary technology uses the help of DL or Deep learning for the development of neural networks or automated code drafting. Software 2.0 is still at its entry phase in the technology market, but businesses are expected to gain expertise with additional technologies like DataOps (Data Operations) and MLOPs (Machine Learning Operations).
Cybersecurity Transformation
With the rise of IoT and 5G technologies in the modern era, cybersecurity is finally being pushed to the core of business operations while ensuring digital transformation. A recent study report of a number of businesses across China, the EU, and the US revealed that cybersecurity remained a top priority with respect to digital transformation and AI implementation.
A number of companies out there leverage artificial intelligence and machine learning for detecting malware and boosting cybersecurity. Effective cybersecurity solutions are especially prioritized in the domain of digital transformation.
Hyper automation
Hyper Automation is aimed at automating businesses and IT processes to a significant extent. Whether it is no-code or low-code adoption or RPA (Robotic Process Automation), machine learning, or AI, businesses should plan at upscaling investments in rapid automation.
Some of the initiatives related to hyper automation are:
RPA: Robotic Process Automation is responsible for handling complicated and redundant tasks at work with the help of software robots. RPA helps in increasing the speed to market, reducing expenditure, and increasing the scalability of business operations.
Low-code Platforms: These come with the simple drag-and-drop functionality for building software. Minimal coding knowledge is required, making it a great platform for non-techie people. Low-code tools also help with API integrations – allowing seamless integrations without the involvement of the developers.
XaaS or Everything as a Service
Anything-as-a-Service or Everything-as-a-Service is another leading digital transformation trend that is helpful in promoting the ‘as-a-service’ model while delivering all possible aid to customers. XaaS goes beyond the concept of the conventional cloud-based models and includes additional services like:
CaaS or Containers As a Service
STaaS or Storage as a Service
FaaS or Function as a Service
VaaS or Video as a Service
UCaaS or Unified Communication as a Service
SECaaS or Security as a Service
Generative AI
Generative Artificial Intelligence (AI) is a kind of revolutionary AI technology that uses existing content like images, audio, text, and more to create similar yet original content.
Some of the most common instances of generative AI are face-based applications through which users are expected to offer images as the input. In response, the app will reveal how you will look across the entire phase of life. Modern enterprises can look forward to leveraging the Generative AI by using the following techniques:
Transformers: including Wu-Dao, LaMDA, and GPT3
GAN or Generative Adversarial Network – featuring two neural networks like discriminator network and generative network
Variational Autoencoders: It is a form of the architecture belonging to Artificial neural networks
AR Cloud
AR Cloud or Augmented Reality Cloud is a digital 3D copy of an ongoing real-world environment created with the help of its spatial properties, and can be thought of as the digital twin of any given real-world surrounding.
While the overall success of AR Cloud will be dependent on the overall maturity of the subsequent 5G networks, businesses like Facebook, Amazon, Google, and others are leveraging investments in the technology already.
Agility as the Top Priority
Cybersecurity is a major concern for a number of industries while adopting digital transformation. The rising concern has prompted businesses to realize that agility is pivotal to surviving dangerous hacking attacks.
Companies want to reach a specific point at which they are not preparing for “what if” situations, but instead have access to actionable steps that are dynamic and prevent them from suffering from any specific outage.
In addition to cybersecurity, improved agility within organizations can serve as the foundation of subsequent digital transformations.
Data Democratization
Data democratization is going to be one of the important aspects of ensuring digital transformation within modern businesses. Data democratization will be promising businesses a future in which data remains open to all for analyzing and drawing insights.
Conclusion
Modern businesses can look into digital transformation trends for 2022 and beyond to ensure success in the long run.
In the modern era, ‘digital’ is the talk of the town. We come across terms like digital data, digital transformation, digital marketing, and so on. Everyone wants to adopt digital. What is digital transformation? What are its benefits to different industries?
What is Digital Transformation?
Digital transformation is the effective integration of high-end digital technology into different areas of any business, resulting in fundamental changes to the way in which businesses operate. Organizations across different industries can benefit from rapid digital transformation. It allows businesses to conceptualize legacy processes, ensure efficient workflows, improve security, and enhance profitability.
It is estimated that around 90 percent of businesses across the world conduct operations on the cloud. As companies continue migrating data to the cloud, a majority of what is required to be done is only replicating existing services in the digital format. However, true digital transformation is much deeper than that. In-depth digital transformation should be transformative throughout the organization, involving the creation of a dedicated technology framework to streamline these data and services into meaningful, actionable insights. The framework designed should be capable of improving almost any facet of the entire organization.
Instead of only migrating data to the cloud, organizations can harness digital transformation to re-evaluate as well as optimize different processes and systems. This will ensure that organizations are interoperable and have ample flexibility to deliver robust business intelligence while setting the future for your company.
Why is Digital Transformation Important?
Digital transformation is responsible for changing the way an organization operates. Workflow, processes, culture, and systems within an organization become integral parts of the process of digital transformation. The transformation is responsible for affecting all possible levels of an organization while bringing together data across specific areas to work more efficiently.
By leveraging the benefits of advanced processing and workflow automation, including Machine Learning and Artificial Intelligence, organizations are capable of connecting the dots across the customer journey in new ways.
Top Benefits of Digital Transformation
For most organizations, the driving force behind digital transformation is related to costs. Moving data to some public, private, or hybrid cloud environment will help in reducing operational costs. It minimizes software and hardware costs while allowing team members to focus on other core projects of the organization.
Improved Data Collection
A number of businesses have to gather huge amounts of data. The real benefit lies in optimizing existing data to ensure in-depth analysis for driving the business forward. Digital transformation helps in creating a system for collecting relevant data while incorporating it to ensure business intelligence at some higher level.
Analyzing how customer data is collected, stored, evaluated, and shared as a part of the digital transformation process is important. As organizations analyze the customer journey as an integral part of digital transformation, they should think about how they can offer clients improved autonomy over their data.
Better Resource Management
Digital transformation helps in consolidating resources and information into a single suite of important tools for organizations. Instead of dispersed databases and software, the process helps in consolidating company resources and reducing vendor overlap. Digital transformation is capable of integrating databases, software, and applications into a centralized repository for improved business intelligence.
Digital transformation is not any specific functional or departmental unit. It is important to optimize as well as secure data at all possible departments. Organizations should also equip teams with high-end, easy-to-use tools to execute the job effectively.
Improved Customer Experiences
Customers in the modern era have higher expectations for digital experiences. Consumers are habituated to having endless options, faster delivery, and low prices. CX or Customer Experience is the all-new battleground for modern brands. As per a report, over two-thirds of organizations reveal that they are competing significantly on the overall customer experience.
CX has evolved as a major driver for ensuring sustainable business growth. One effective way of differentiating your brand from customers is to analyze that you pay attention to their privacy. Offer customers ample control on how their data is gathered and used while empowering them with relevant autonomy to ensure decisions around the data.
Data-driven Customer Insights
Data is the key to unlocking important customer insights. By effectively understanding the customers and their specific needs, you can come up with a relevant business strategy that is highly customer-centric. With the help of both unstructured and structured data, including social media metrics, such insights can help in driving maximum business growth.
Data allows strategies to deliver highly relevant, agile, and personalized content,
Collaborative Digital Culture
By offering team members the right tools, customized to your work environment, the process of digital transformation helps in encouraging a digital culture.
While these strategies and tools offer a seamless way to ensure collaboration, they also help in moving the entire organization digitally. The digital culture shift is important for businesses to be sustainable throughout. It enforces digital learning and upskilling to team members for leveraging the benefits of digital transformation.
Better Agility
Digital transformation makes organizations highly agile. Businesses can look forward to improving agility with effective digital transformation to enhance speed-to-market and make use of CI (Continuous Improvement) strategies. This allows for rapid adaptation and innovation while offering a dedicated pathway to ensuring improvement.
Improved Productivity
When you have access to the right technology tools working together, it can help in streamlining overall workflow and improving productivity. When manual tasks are automated, and integration of data takes place across the entire organization, it empowers respective teams to function efficiently.
Getting Started with Digital Transformation for Your Organization
A digital transformation strategy can be regarded as a dedicated plan of action for analyzing, introducing, and driving the digital transformation initiative forward. Coming up with a strategy will help in defining what business goals you wish to achieve with the help of digital transformation. A proper digital transformation strategy will help in creating a framework for following the ever-evolving process.
The Internet is a big place, so it makes sense that those with an e-commerce store are keen to do what it takes to increase conversions. The journey a brand takes when increasing conversions can differ, but it is important to ensure that areas of a website are not being overlooked.
The competitive nature of the Internet means that a simple flaw with a website is all that is needed to rank lower than the competition online.
Fortunately, some steps can be taken to ensure that conversions are always the best they can be, regardless of the product or service being sold.
Ensure The Design is Persuasive
Despite there being several ways of increasing conversions, one of the important starting points is the design of the website. Of course, an e-commerce store mustn’t compromise its brand. However, the design must persuade visitors to remain on a site.
A clean design with an obvious call-to-action will always fare better than a page cluttered with options and information. Likewise, clear imagery of the products available that reflect the essence of the brand should be used instead of standard stock imagery.
An e-commerce site that can keep visitors on the site longer is more likely to see increased conversions.
Ensure the User Experience is the Best it Can Be
The design of the website may entice visitors, but niggly navigation and slow loading pages will often be enough for a potential customer to look elsewhere for products or services. Fortunately, this can be easily avoided by ensuring the user experience is the best it can be.
Not only must the site load quickly but must also be designed with mobile users in mind. It is also important that any information regarding products or services can be found quickly. Users that can find information quickly are more likely to make a purchase, thus increasing conversions.
Use Search Engine Option Optimization and Conversion Rate Optimization Together
When promoting an e-commerce store online, some may choose search engine optimization or conversation rate optimization. Both are important, but those wanting to increase conversion will find using both methods are often the key to success.
SEO is often about being found online and is carried out via keyword research. However, this doesn’t mean that visitors will stick around after visiting the site. This is where CRO comes in.
Keywords need to be used in the content, but not to the point where it is unreadable and bewilders visitors. Conversion rate optimization means taking the keywords and using them in a way that still offers value to the visitors while being complemented by a clear call-to-action and an easy sign-up process.
Take The Shopping Experience to Social Media Platforms
Very few businesses need informing about the popularity of social media, but many are surprised to discover how lucrative social media websites can be when increasing conversions.
Although nothing can replace an efficient e-commerce store, offering the same great products and services with the same branding on social media allows a business to make connections with customers that may have otherwise been overlooked.
As well as promoting products to a new audience, social media integrations mean making a purchase is easy, and can increase the likelihood of repeat purchases in the future.
Make Sure to Promote Reviews and Feedback on the Website
An e-commerce store is about finding balance when delivering information to customers but showcasing the excellence of a brand is something that should be placed on all e-commerce stores.
Despite many e-commerce stores offering fantastic products and services, some mislead or take advantage of customers. Fortunately, those shopping for products online have become more knowledgeable about checking the integrity of an e-commerce store.
An e-commerce store that has a strong social presence online will find more favor with customers than those who don’t. Customers can be left on various platforms, but there will be no issues integrating reviews into the website.
Showcasing genuine reviews from others instills confidence in those using the site, increases the likelihood of a purchase being made, and helps improve the social proof of an e-commerce store moving forward.
Abandoned Carts Should Be Treated as a Benefit
When checking the sales of a product, it can be disheartening to see an abandoned cart. However, it is important to ascertain why this has happened. If there are many abandoned carts, then it could be due to a checkout problem. Making a few changes could be all it takes to improve conversions.
However, there can be other reasons for abandoned carts that aren’t due to a fault with the e-commerce store. Some may have been in the middle of a transaction before becoming distracted by something else.
Similarly, those using a smartphone to make a purchase may have lost Internet access when trying to make a payment.
Reaching out to customers with a small discount can often be enough for them to make a purchase and gives customers an example of the brilliant service they can expect moving forward.
The steps taken to increase conversions can differ among e-commerce stores. However, taking advantage of the steps taken ensures that a website is taking full advantage of every opportunity when increasing its online conversions.
Running a business is challenging, and there can be instances where some are searching for ways to increase the turnover of a business. Although recurring billing is commonplace, it is still avoided by many businesses. As such, this could mean that the company is missing out on revenue regularly. Recurring billing can significantly boost cash flow and customer lifetime value for businesses in 2025. The subscription economy has unlocked a lucrative revenue stream — it’s estimated at $3 trillion globally in 2025.
Companies from e-commerce retailers to SaaS vendors, streaming services to online educators, are adding subscription and membership options. Implementing these models well can turn one-time buyers into loyal, repeat customers. However, succeeding with recurring billing in 2025 requires attention to new challenges and trends.
The following is an overview of steps that can be taken to introduce recurring billing into a business model and use it effectively.
More Revenue Using Recurring Billing
Be Aware of The Challenges
Although recurring billing is a fantastic way of collecting more revenue, it is vital to be aware of the challenges that could be faced. When subscriptions have varying renewal dates or when promotional pricing ends, you need systems in place to deliver products or services on time and bill correctly. Customer churn is another reality. Across industries, average subscriber churn hovers around 4–5% per month, meaning nearly one in twenty customers may cancel monthly. Consumer-facing sectors often see even higher churn: for example, digital media subscriptions had roughly 6.9% monthly churn in 2023.
These figures underline the importance of planning retention strategies up front. Use analytics to track usage and cancellations, and define clear renewal and exit processes so changes are not disruptive. Being aware of these challenges lets you prepare contingency plans (e.g., automated notifications for renewals or flagging at-risk accounts) to keep revenue steady.
Ensure Security Is the Best it Can Be
Regardless of the product or service being sold using recurring billing, the security of the website needs to be the best it can be. As well as instilling confidence in customers entering their details, it also ensures the sensitive information doesn’t fall into the wrong hands, which will do little to raise the profile of a brand.
Use a PCI-compliant payment system or subscription platform that tokenizes credit card data – this way, actual card numbers never reside in your database. Many billing providers offer a secure “vault” to store cards, which greatly simplifies PCI-DSS compliance. Encrypt all data in transit and at rest, and implement fraud prevention measures (such as 3D Secure or machine-learning fraud filters). Remember that subscription businesses are attractive targets for hackers since they hold stored cards. In practice, rely on proven payment gateways and update them regularly. Keeping security strong not only protects customer trust, it also avoids costly breaches and fines.
Provide Clear Terms and Contracts
Transparency is key to avoiding disputes and cancellations. When customers sign up for a subscription, give them a clear agreement or terms of service that outlines billing frequency, price (including any future price changes), refund policy, and cancellation rules. Many jurisdictions now require auto-renewal terms to be disclosed clearly (bold or larger font), so make sure your checkout and confirmation emails summarize the plan details. It’s best practice to email subscribers each invoice or renewal notice; this reminds them of the upcoming charge and provides an easy link to manage or cancel if needed.
By setting expectations (for example, “Your membership will renew automatically every 30 days at $X. You can cancel at any time.”), You reduce the risk of chargebacks and build trust. Providing a customer-friendly portal or account page for viewing and accepting the agreement is also effective. Clear communication about terms keeps customers informed and prevents misunderstandings.
Diversify Payment Methods and Streamline Billing
Make it easy for customers to pay and prevent failed transactions. In 2025, consumers expect to pay with digital wallets and alternative methods. Over half of Americans already use mobile wallets (Apple Pay, Google Pay, etc.) more often than traditional cards. Enable these wallet options alongside cards and ACH/bank debits. Payment surveys predict that QR-code checkout (33% of merchants), Buy-Now-Pay-Later plans (25%), and even cryptocurrencies (21%) will gain traction.
While BNPL isn’t typically used for recurring charges today, just accepting it on initial orders can capture more customers. At minimum, support major credit/debit cards, top mobile wallets, and local popular methods (e.g., PayPal, SEPA, UPI, etc.), so you don’t lose sales to payment friction. Equally important is handling failed payments gracefully.
A common cause of involuntary churn is expired or declined cards. Provide customers with an easy way to update expired cards or switch payment methods (e.g. a link in their account settings or reminder emails). Use your processor’s account updater service to refresh changed card details automatically. Also implement smart retry and dunning processes: if a payment fails, send polite reminder emails and retry the charge after a short interval. These tactics pay off: one subscription platform reported saving 72% of at-risk subscribers with recovery events (dunning emails and retries), resulting in an 8.6% lift in revenue. By broadening payment options and automating decline handling, you’ll reduce churn and keep monthly revenue more consistent.
Consider Products and Services That Can Be Used for Recurring Billing
Almost any consumable or ongoing service can be sold on a subscription basis. Look beyond the obvious SaaS or streaming examples. Think in terms of repeated customer needs. For instance, you could offer:
E-commerce Consumables: Set up “replenishment” subscriptions for products that run out regularly. This could be pet food, vitamins, coffee, personal care items or office supplies. Customers love not having to reorder these items manually.
Subscription Boxes: Curated monthly boxes (beauty, snacks, books, hobby kits, etc.) continue to grow. A personalized box can delight customers and create a habit. Offer customization so subscribers feel it’s tailored to them.
SaaS and Digital Services: The classic model. Offer tiered plans (basic, premium, enterprise) with monthly or annual billing. Consider usage-based add-ons (e.g. extra storage or premium features for an additional fee). For example, many accounting or marketing tools charge a base rate plus per-seat fees.
Education & E-Learning: Charge a monthly membership for access to a library of courses, tutoring hours, or professional training content. Many online learning platforms now bundle courses and charge a recurring fee. This can open your market to customers who prefer smaller monthly payments over a large one-time course fee.
Digital Media & Entertainment: Streaming video, music, podcasts, and digital news sites are obvious examples. You can also sell premium tiers (ad-free, offline access) or exclusive content via subscription. Think beyond media giants: even niche content creators (e.g. specialty magazines, indie game developers) can use membership fees.
Other Services: Many physical and service businesses are adding subscriptions. This includes gyms and fitness apps (monthly membership), meal-kit deliveries, automotive services (routine maintenance plans), pet-care services, or even curated fashion rentals. Even traditional retailers can add VIP clubs or maintenance programs on a subscription basis.
A recent study predicts that by 2025, about 75% of direct-to-consumer (DTC) businesses will offer some kind of subscription service. Meanwhile, customers value subscription models: in 2024, the average consumer had over 8 active subscriptions.
These trends mean it’s never been easier to justify finding a way to offer recurring billing in your niche. Audit your products and services for opportunities – you might discover new revenue simply by packaging things differently.
Recurring Billing Can Be Used for Gift Subscriptions
Practicality and affordability can be two of the most important components of a gift, so a subscription that allows people access to products and services they love can yield increased revenue for a business. The global gift market is worth tens of billions – for example, about $72.6 billion in 2024.
You can capture some of this spend by making your subscription a gift. For instance, allow customers to purchase a 3-, 6- or 12-month prepaid subscription as a gift card or package. E-commerce sites do this by selling gift vouchers that auto-apply to a recurring plan when redeemed.
Bundles also work: offer a “starter kit” or welcome box for new subscribers, or partner with other brands to create co-branded gift subscriptions (e.g. a coffee company and a book club). Promote these especially around holidays, birthdays, and special events. By marketing subscriptions as gifts, with enticing options and packaging, you attract one-time buyers who can become recurring customers.
Recurring Billing in Digital Media and Entertainment
The media and streaming industry exemplifies how powerful recurring revenue can be. Platforms like Netflix, Disney+, Spotify and others have hundreds of millions of paying subscribers worldwide. Video streaming alone is a massive market: global streaming revenue was about $129.3 billion in 2024 and is projected to reach $416.8 billion by 2030. It’s no surprise 88% of U.S. households now have at least one paid video streaming subscription.
For any business with digital content, adding subscriptions is critical. Consider offering subscription packages or bundles of content (for example, grouping back-catalog movies, podcasts, or premium articles). Create multiple access tiers (e.g. basic/standard/premium or monthly/annual) and highlight features like ad-free viewing or offline access. The data shows consumers are willing to pay: on average, people spend about $61 per month across roughly four streaming services.
To capture your share, focus on convenience and content — for instance, exclusive releases, bundled memberships with partners, or special rates for longer commitments. Flexible access (paying monthly) is especially attractive in media: a recent survey found 63% of subscribers prefer monthly billing over annual plans
Offer Flexible Plans and Billing Options
Flexibility can dramatically improve retention. Offer multiple billing cycles (monthly, quarterly, annual) so customers can choose their preferred commitment. It’s common to discount longer-term plans, but don’t force annual billing if customers want to pay-as-you-go. Surveys show 46% of subscribers would stay if allowed to downgrade to a lower plan instead of leaving, and 39% would stay if they could pause their subscription.
With this in mind, build features like “pause” or temporary hold on subscriptions (often used in fitness or meal plans). Allow easy plan changes (upgrading or downgrading tiers) without penalties. Also offer add-ons or one-time purchase upgrades (e.g. gift a workout class, book an expert session) to let customers customize their plan. In short, the easier you make it for customers to adjust their plan to fit their needs, the less likely they are to cancel entirely. Tracking trials and new sign-ups by plan type can also reveal which options are most appealing, so you can refine your offerings over time.
Proactively Engage Customers at Renewal and After Cancellation
Don’t wait until a subscription lapses to reach out. As a subscriber’s term nears its end (or a free trial expires), engage them: send an email or notification checking in on their experience. Ask for feedback (“We hope you’re enjoying X. Can we do anything to improve your experience?”) and be ready to act on it. Offer a limited-time discount or bonus if they renew (e.g. “Renew now and get 10% off your next 3 months”).
Small gestures at renewal time can pay off: research shows 63% of subscribers will stay if given an attractive offer at renewal time. Even after cancellation, keep the door open. Many customers return when their circumstances change or your offerings improve. In fact, studies find up to 20% of people who cancel a subscription reactivate it within six months. They might come back with new pricing or added features. To capitalize on this, maintain a “win-back” campaign: add cancelled accounts to a nurture list and periodically send them updates on product news, special promotions, or changes they liked.
Also, make it easy to resubscribe (for example, by not deleting their account data immediately). Treat customer relationships as ongoing – check in with feedback surveys, loyalty rewards, and helpful content – and you’ll find many cancellations can turn into reactivations or positive reviews.
Leverage Automation, Analytics, and Smart Billing Tools
Use modern subscription management tools to automate the heavy lifting. A good recurring-billing platform can handle invoicing, payment collection, taxes, and compliance automatically. Look for systems with built-in analytics dashboards that track MRR (Monthly Recurring Revenue), churn, ARPU (average revenue per user), and other key metrics. These insights help you spot trends (e.g., which plan tiers lose customers) and make data-driven decisions. Many platforms now offer AI-driven features: for example, predictive analytics to identify accounts at risk of churning (based on usage patterns or payment history), enabling you to intervene early.
Equally, automate your dunning workflows: send scheduled reminder emails or SMS for upcoming payments and failed charges. Personalize these messages – for instance, a gentle “Your subscription renews in 3 days” or “Your payment failed; update details here” – to recover more revenue. One platform’s data shows that targeted recovery emails can reclaim nearly 50% of failed payments, extending subscriber lifetimes by over four months.
Finally, tie your billing system into marketing and CRM tools. When billing is integrated, you can trigger marketing campaigns (e.g. win-back offers) and personalize outreach based on subscription status. For example, if analytics show a segment of users is highly engaged but still on the basic plan, send them an upgrade offer. The combination of robust automation and constant measurement means you can fine-tune your strategy rapidly and focus on growth rather than manual billing chores.
Engage Customers and Build Loyalty
Even with automation, never underestimate the value of human-centered engagement. Use customer data to send personalized communications: birthday or anniversary discounts, usage tips, or thank-you notes for milestone renewals. Consider a loyalty or referral program that rewards long-term subscribers with perks (exclusive content, freebies, or credits). Engage subscribers outside the billing relationship too – for example, create a community (forums or social groups) or send newsletters featuring new features and how-tos.
As industry experts note, combining technology with a personal touch is most effective. Use affordable marketing tools like email automation, chatbots, and analytics to stay in touch at scale, but complement them with real human interaction on critical accounts. When customers feel valued and part of a relationship (not just a number), they’re much more likely to stick around and even become advocates for your brand.
Conclusion
In 2025, maximizing recurring revenue means balancing solid technology with customer-centric strategies. By securing payments, offering flexible options, automating intelligently, and continuously engaging subscribers, you turn one-time buyers into loyal, long-term customers. Applying the tips above — updated for today’s market data and tools — will help your business capture more value from every subscriber and grow sustainably in the subscription economy.
Frequently Asked Questions
What is recurring billing, and how can it grow my business?
Recurring billing lets customers pay automatically on a set schedule. It creates steady cash flow, makes revenue easier to predict, and turns one-time buyers into long-term customers.
What challenges should I expect when setting up recurring billing?
You’ll need to manage renewals, promo expirations, and failed payments. Customer churn is common, so plan ahead with retention strategies and automated systems to reduce cancellations.
How do I keep my recurring billing system secure and compliant?
Use a PCI-compliant gateway, encrypt payment data, and store tokens securely. Add fraud tools like 3D Secure and clearly explain payment terms to protect both your business and your customers.
Which payment methods should I offer for better results?
Support cards, ACH/bank debits, and digital wallets like Apple Pay or Google Pay. Adding Buy Now, Pay Later can also increase sales and average order value.
How can I reduce churn and keep subscribers longer?
Let users pause their subscription instead of canceling, and run win-back campaigns with special offers. These small steps can lead to big gains in retention.
Running a business is challenging, and there can be instances where some are searching for ways to increase the turnover of a business. Although recurring billing is commonplace, it isn’t used by all businesses. As such, this could mean that company is missing out on revenue regularly.
Fortunately, the introduction of recurring billing can be applied to many different business models and can help build a stronger bond between companies and customers.
The following is an overview of steps that can be taken to introduce recurring billing into a business model and use it effectively.
Be Aware of The Challenges
Although recurring billing is a fantastic way of collecting more revenue, it is vital to be aware of the challenges that could be faced. For example, if different subscriptions have different periods, then some form of management will need to be undertaken to ensure customers are receiving products at the right time.
The challenges of a business can vary depending on the product or service being sold but being aware of the challenges allows brands to have a contingency plan in place and make changes at the right time making the process non-disruptive for customers.
Ensure Security Is the Best it Can Be
Regardless of the product or service being sold using recurring billing, the security of the website needs to be the best it can be. As well as instilling confidence in customers entering the personal details, it also ensures the sensitive information doesn’t fall into the wrong hands, which will do little to raise the profile of a brand.
Ensuring that data is safeguarded and encrypted is easier than it has ever been and is essential for e-commerce stores wanting to take advantage of recurring billing.
Ensures Customers Receive a Contract Regarding Recurring Billing
When collecting payments using recurring billing, the last a business wants is a misunderstanding with customers. Contracts remain an important part of any agreement, and for good reason.
As well as safeguarding the business when a customer agrees to recurring billing, it also ensures that users are given a full breakdown regarding their subscription. This allows both parties to be fully aware of the agreement in place and allows for increased revenue without there being disagreements in the future.
Make It Easy for Customers to Update Payment Details
Despite the benefits associated with recurring billing, there can be instances when payments fail. The main reason for this is that customers have been issued a new debit or credit card and have not updated these details in their account.
Introducing a proactive way of keeping details up to date can help ensure that recurring payments can be processed efficiently, leading to more revenue.
An e-commerce store can also use an account updater that allows card details to be refreshed within the payment system, which again helps avoid failed transactions.
Consider Products and Services That Can Be Used for Recurring Billing
Recurring billing can be overlooked by some e-commerce stores simply because it feels their business models is not a good fit. Although there can be instances when recurring billing isn’t a good fit, it is more flexible than many assume.
Recurring billing will involve a repeat purchase of a product or service, so the subscription model can depend on the length of use.
For example, those selling perfume can offer subscriptions based on usage, and even offer to introduce new fragrances based on their profile. If a bottle of perfume is expected to last two months, then a recurring payment can be set up, so shoppers never run dry when purchasing their favorite perfume.
Software as a service (SaaS) is a great fit for recurring billing, as there are many sectors to explore. Accountancy software can offer a set amount of features for a monthly fee, whereas music production platforms can offer a subscription that allows access to new samples and loops every month.
Those who offer education courses can also use recurring billing to their advantage. As well as selling courses for a one-off fee, breaking the courses down allows benefits for the customer and the business.
Those offering the course can increase their revenue due to the monthly payments in addition to other sales, while customers can access courses that may have been unaffordable otherwise.
Recurring Billing Can Be Used for Gift Subscriptions
Practicality and affordability can be two of the most important components of a gift, so a subscription that allows people access to products and services they love can yield increased revenue for a business.
When selling gift subscriptions, it is a good idea to offer several options. This allows the business to find more traction with users while allowing customers to become more aware of the products available.
Check-In with Customers Who Coming to an End of a Subscription
Although there will be instances when recurring billing is ongoing until a customer cancels, there will be others that operate within an agreed period. When a user is nearing the end of their subscription, this can be the ideal time to check in with them and gather some feedback so far.
Even if there is negative feedback, this can be used to improve the subscription model moving forward and allows the customer to witness a brand that listens to customers and makes a change. Simple interactions with customers can make all the difference when increasing revenue using recurring billing.
The modern payment industry keeps evolving at a rapid pace. As more businesses go digital amidst the pandemic, the concept of virtual credit card payments is becoming the go-to business solution for businesses – both offline as well as online.
There has been an overall increase of around 85 million active virtual credit card payment users. The global economy has managed to improve during the second half of 2021, and most businesses are now in a better position to handle the pandemic now than they were during the first wave of the COVID-19 pandemic. For the payments industry, offering support to businesses as they plan their way beyond the COVID-19 pandemic will be an overarching narrative of 2022.
The Rise of Virtual Credit Card Payments 2022
Throughout the pandemic, the dependence of consumers on digital payment technology has made modern transaction methods quite an expectation rather than just a feature. It is estimated that over 80 percent of consumers using leading digital wallet options remain satisfied with those services. The methodology is known to extend past the sales of traditional B2C or Business to Consumer methods. However, nowadays, B2B or Business to Business organizations are becoming increasingly dependent on alternative methods of payments for sending and receiving funds to buyers and vendors.
The main component of the digital payment industry that is evolving rapidly is the concept of virtual cards. Businesses all around are beginning to understand the efficiency and importance of virtual cards for AP (Accounts Payable) and expense management operations.
Top Benefits of Virtual Credit Cards
Typically, a virtual credit card payment through a dedicated credit card will help you in performing all the core functions of a traditional card payment solution – only better.
Everything is carried out online. Therefore, it will include some basic steps towards adding money, performing transactions, paying buyers or suppliers, and so on. Some of the core benefits of ensuring virtual credit card payment solutions for businesses in 2022 are:
Improved Security
With the wide range of security challenges for traditional payment cards, physical credit cards have become quite a common target for fraud.
The main reason why virtual cards are considered more safe and secure is that you are capable of pre-setting a particular spending limit you would like to have at any time. There is also the option of terminating the account anytime you would like, with just a single click in case of any data breach. During every transaction, there is a one-time bank number to use for performing the payment.
In contrast to the ACH payments and checks, it can significantly help in improving the data security of the respective bank account details while protecting your privacy – even in the case of transactions. With the help of virtual cards, it is impossible to execute account theft on e-commerce.
E-commerce Convenience
Unlike conventional banking institutions with fixed working hours, virtual financial institutions work round-the-clock. Therefore, they can be on standby for international businesses whenever you require. The best part is that there is no need to waste time going to a physical branch. All you are required to do is make a few taps on your mobile device, and you can easily implement online transactions to make your business more efficient.
With virtual credit card payments, you can forget manual mistakes or paperwork. You can embrace streamlined accounts for ensuring that you are covered throughout. The single-issued virtual credit card enables the Accounts Payable department to focus on core financial matters and focus on your business.
Reduced Cost
A number of virtual banks or institutions deliver access to reduced fees needed for customers. With every amount that you spend, you can look forward to earning cash rebates for paying your buyers or suppliers, and virtual credit cards come at low or no cost.
As everything is executed online, the overall operating costs can be reduced with the help of virtual transactions. In turn, finance service providers will be charging less to customers.
Revolutionizing the B2B Digital Payment Space
Electronic payments are on the rise. It is estimated that more than 80 percent of B2B payments will go entirely digital by 2025. Accounts Receivable and Accounts Payable departments are increasingly shifting to digitization over complicated manual processes for completing vendor payments and improving overall cash flow. The innovative set of tools is offering B2B organizations improved consistency and transparency into how they are spending money or obtaining the highest revenues.
Virtual card payment is one such innovative application for revolutionizing the modern payment industry. The virtual credit card payment industry is expected to reach a value of around $6.8 trillion by 2026, a major jump from the value of $1.9 trillion in 2021. It is becoming increasingly popular amongst B2B firms relying on buyers to buy bulk items for the purpose of resale. This is because virtual credit card payment helps employers in tracking the business expenses of workers while setting spending limits for preventing fun exploitation or overspending.
To top it all, modern gig economies like food delivery or ride-sharing services can make use of virtual cards for appointing benefits of earned wages to contract-based workers.
Conclusion
The pandemic has accelerated the pace of digital payments while focusing on the shortcomings of outdated, complicated manual processes for a number of organizations around the world. Due to this, an increasing number of B2B companies are tapping into newer technologies like virtual credit card payments for improving the overall operations and security mechanisms for high-value transactions.
The digital shift during the ongoing pandemic has resulted in permanent behavioral changes amongst businesses and customers alike. Due to this, e-commerce transactions have accelerated while being anticipated to keep moving forward in the upwards trajectory – especially for B2B organizations.
With leading brands like Taco Bell and McDonald’s shifting toward pop culture and garnering a spot in social conversation, millennials have made food marketers realize that food is fuel.
The advent of the global pandemic only complicated the existing connection, however. Restaurants have been asked to ensure safer food delivery while minimizing overall contact. Later, as the category started getting crowded, restaurants all around were expected to execute this in a way that differentiated them across different channels.
The concept of loyalty programs in the restaurant industry came about in 2020. In most cases, consumers all around link loyalty programs – along with the discounts, convenience, and benefits that they provide – with improved customer experiences. In a recent study, it was revealed that around 69 percent of respondents claimed that loyalty programs brought them back to the restaurant culture.
An Insight into the Loyalty Programs in the Restaurant Industry
According to one report, it is estimated that around 47 percent of modern diners make use of at least one loyalty program. The overall share of consumers using loyalty programs in restaurants has increased by around 12 percent in 2022. The QSR segment has experienced the highest growth, with 24 percent of chain QSR customers using restaurant loyalty programs in 2022.
The increased utilization of loyalty programs can highlight the increasing number of lucrative reward programs in the modern restaurant industry. There are several restaurant chains that have already launched or improved their loyalty offerings to win over the existing market share, while generating return visits and improved spending.
For instance, Popeyes has recently come up with their first-ever loyalty program, and McDonald’s is planning to extend MyMcDonald’s Rewards in the upcoming months. Chipotle and Taco Bell are also committed towards enhancing the existing programs. The loyalty programs help restaurants target the consumer base that spends money most and market to them.
The Role of Loyalty Programs in the Restaurant Industry
It is possible that a highly saturated loyalty program can end up turning off some consumers who don’t want to dedicate space on their mobile devices for restaurant loyalty apps. However, it is believed that young consumers especially look forward to taking advantage of such programs. The leading loyalty program consumers are bridge millennials and millennials. They continue signing up for new loyalty programs quickly in comparison to other age groups.
A majority of modern diners do not appear to mind the inclusion of more applications to their smartphones. Around 60 percent of consumers who are already using at least one restaurant-based loyalty program revealed that they would consider spending more money on food orders from different restaurants if they had access to a dedicated loyalty program.
While a number of restaurants have launched different types of loyalty programs in the span of the past few years, research reveals that there is still more room for growth. Restaurants can still consider improving diner awareness. Both QSR and full-service customers are more likely to interpret program unavailability as a major reason for not using loyalty programs.
The Change in Consumer Behavior
Consumer behavior all around has experienced a major shift towards the concept of digital ordering, and modern habits are expected to stick around. Another report revealed that digital sales will be on the upward scale to span around 54 percent of the entire QSR business by 2025, a 70 percent increase per pre-COVID estimates. As consumers continue adopting the notion of digital ordering, the delivery of a dedicated loyalty program in a digital space can be a great way to incentivize end consumers to ensure returns.
It could also feature trials. According to a study, around 19 percent of consumers revealed that a loyalty program would be sufficient for them to try out new QSR, and 30 percent of consumers revealed that they would go ahead with downloading a restaurant app to get access to loyalty points.
Leveraging the Benefits of Loyalty Programs in Restaurants
Restaurants are rapidly turning to loyalty or reward programs to encourage the overall sales – especially amidst the pandemic-induced economic changes, as a number of diners are choosing to eat at home rather than dining out.
Coupons or loyalty rewards seek the attention of deal consumers. Loyalty programs – like a simple app-based service or a punch card – are aimed at targeting individuals who might have already visited the restaurant. It encourages them to return.
It is regarded as more budget-friendly to retain a customer than to bring in new ones. Therefore, loyalty programs help in delivering more ROI than other relevant marketing strategies, because it targets the customers directly, and not prospective customers.
At the same time, customers want to feel special. They are looking for a relationship with the brand and not just to do some transactions. Loyalty programs allow them to enter an exclusive group or club while helping them feel more connected to the brand. When a frequent customer receives an app notification that they have received a meal box combo or a free drink, they are more likely to return while spending money at the restaurant.
Conclusion
There are a multitude of options for loyalty programs for restaurants. It could include traditional punch cards and swipe cards to modern restaurant apps. Regardless of the approach adopted, the loyalty program can help in attracting and retaining repeat customers.
Repeat consumers serve to be the lifeblood of any restaurant. They could also depict the role of brand ambassadors. A loyalty program is helpful in ensuring that these customers keep coming back.
CVS plans to invest around $3 Billion on the concept of digital enhancements for improving the overall consumer experience and their community locations. The report was generated by Shawn Guertin, the Chief Financial Officer and Executive Vice President of CVS.
The company has managed to reach around 5.6 million subscribers to the CarePass program in Q4, a 40 percent increase from the previous year. The statement was released by Karen Lynch, the President and CEO at CVS. Lynch attributed the overall increase in the number of users to the partnership of the pharmacy chain with Aetna.
Around 80 percent of patients are using the self-service digital tool at CVS for completing necessary forms ahead of the MinuteClinic and HealthHUB appointments, said Lynch on a call. At the same time, the company is now serving around 40 million customers with the help of digital channels. This is a 10 percent increase in the period of the last six months.
An Insight into the Scenario
The COVID-19 pandemic across the globe has put challenges in front of most of the retailers out there. Even after that, CVS has increased in revenue in the past year.
The leading drugstore chain has attributed the overall growth to the increase in booster administration at its diverse locations. It has also been due to declining COVID-19 pandemic-related expenses in the payer division. As the company continues working on the digital strategy, it also aims at building up on previous technology investments. As such, Lynch noted that over 2 million visitors had visited the official website of CVS – cvs.com – in the span of last year. It is estimated to be around 55 percent increase from 2020.
Machine Learning (ML) and Artificial Intelligence (AI) have been useful to CVS towards improving key metrics, reducing gaps in the overall treatment, and increasing rates of prescription refills. The company is committed to working towards coming up with relevant strategies for making it convenient and simple for individuals to pick up their medications.
Different Initiatives by the Company
The retailer has come up with different initiatives related to CVS health zones aimed at addressing social factors related to health in high-risk communities, Lynch revealed during an interview call. Currently, the company continues running initiatives in as many as six zones or areas. However, the company also aims at expanding into more advanced options in the coming year.
The health zone initiative by CVS has been laid out as the company continues preparing for the shut down of as many as 900 stores in the span of the next three years. The motive o behind this step is to align with the ever-evolving customer shopping experiences and patterns. The retailer will start shutting down around 10 percent of the respective brick-and-mortar locations during the spring.
Lynch, in a call, said that the company will be connecting consumers in more locations, in different ways, and on their terms. With the help of the digital-first technology-forward approach along with improved omni-channel health experience, these strategic moves will be helpful in accelerating the overall growth of foundational businesses.
Adoption of the Digital Strategy by CVS
As CVS continues restructuring the physical footprint and concentrating more on the digital strategy, Walmart aims at venturing more into the modern healthcare sector. In 2020, Walmart made the announcement of its national expansion of Walmart Health Stores after it piloted the concept in Dallas, Georgia.
Earlier in 2022, the retailer made the announcement of its partnership with Quest Diagnostics. The partnership is aimed at introducing healthcare lab-based testing services through its website, which will allow customers to purchase over 50 tests. The tests can range from heart health and digestive issues to infectious diseases and allergies.
Digital Drug Store
While an increasing number of customers continue avoiding or cutting down in-store shopping amidst the ongoing pandemic, CVS has still observed a major increase in the overall visits to the official website. The company has also experienced an increase in the overall convenience and range of services offered.
The strategy of the company has paid off well. This is because Woonsocket – a company based in Rhode Island – has revealed that the overall Q4 revenues in the retail segment have increased around 12.7 percent. Lynch added that the company is advancing on improving the overall retail portfolio while pivoting the stores into three distinct formats – conventional CVS Pharmacy locations, improved HealthHUBs, and primary care clinics. She added that the retailer will be moving ahead with its plans of de-densifying the stores on the basis of buying requirements and consumer health. It would also depend on the major shifts in the population of the United States and omni-channel preferences.
Walmart Improving Healthcare by Offering Lab Test Partnership
Walmart continues adding to its strategies in the healthcare industry with its plans to commence offering healthcare lab-based testing services over the website with the help of its expanded partnership with Quest Diagnostics.
Customers can consider initiating requests as well as purchase tests for a number of health-related issues. The requests are reviewed as well as ordered by physicians per the requirement. Once the requests are purchased, customers can continue making appointments at Quests-centric service locations along with specific Walmart stores.
The partnership serves to be a great way for the retailer towards expanding its overall reach in the spectrum of healthcare services. It will also help in testing the overall extent to which the customers will be observing it as a core healthcare destination, along with online platforms, with additional goods and services the retail giant has to offer.
Accepting credit cards today is a must-have for almost all businesses these days. Not only are customers shifting their purchases to third-party apps for basic things such as taxis, renting a place to live, ordering take-out, medicine, or paying for groceries, they’re looking to do it via a cashless and touchless transaction. What was expected as standard to pay via cash is now a hassle. Why would someone pull out their purse or wallet, sift through money, count it, check the change is correct when they can simply sway their phone in front of some device?!
However, most such businesses are classified as high-risk merchants since they perform too many card not present (CNP) transactions. As this high-risk merchant account tag becomes rampant and commonplace, we look at what really is a high-risk merchant account and what are some trends business owners must understand about high-risk merchant accounts in 2022. This is especially relevant today as real threats are insistent given the sophistication of nefarious actors and heightened geopolitical concerns in areas of the world that have traditionally resorted to threats of hacking and financial meddling.
What is a High-Risk Merchant?
There are no set rules that would classify a business as a high-risk merchant but relatively specific characteristics that they represent. This can be a particular industry that may be more susceptible to illegal activity, fraud, or chargebacks. Some examples are eCommerce, gambling and gaming, or online pharmacies, to name a few.
Then there is how a transaction is conducted that can cause alarm. Manually entering a card number poses a risk of error from data entry. Or the card is not present at the point of sale, so there’s the potential that it may be stolen.
Finally, most businesses outside Australia, Canada, the European Union, Japan, the UK, and the US are high-risk. Not because only companies in these jurisdictions are trustworthy, but rather that these jurisdictions have one the most vigorous bank regulatory environment.
Below are some trends to consider for 2022 for high-risk businesses
Expect to spend more to protect against fraud
According to research published by the Association of Certified Fraud Examiners (ACFE) and Grant Thornton, an accountancy firm, 51% of respondents have recently experienced an uptick in fraudulent activity. 71% of respondents expect an increase in fraudulent activity over the next year. 81% of businesses responding to the study have already taken anti-fraud measures to prepare for this rapidly fluid environment.
The biggest fraud risk companies believe they face from Cyber-fraud. As a result, 38% of businesses have increased investment in technology to protect against these threats. That is the most likely outcome as businesses worldwide increase their spending on the latest technology to protect against frauds, especially cyber-attacks and data breaches. This is even more pressing as the US government warns businesses to be aware of heightened cyber-attack risk. Some of the most novel ways of combating these threats are already in the works, AI, ML, and quantum computing, requiring a hefty investment now, which their investors will look to recoup.
The Customer Experience will be critical
Not being able to speak to a company representative when you really need to, you know, in the event of a fund hold the equivalent of a merchant’s monthly cash flow, can be a perfect reason why businesses lose customers.
A few things are standard practice in the high-risk payment processing industry, for example, fund holds or even being enrolled into a VDMP. However, problems arise when you can’t get anyone on the phone to explain why something happened and when it will be fixed. Even worse, you get someone on the phone, and the representative has no clue.
Locally based support available 24/7/365, staffed with well-trained, knowledgeable team members, will be what sets a merchant account provider apart. The customer experience will increasingly be the differentiator.
eCommerce, mCommerce, and cashless transactions are here to stay
Changes in consumer behavior are here to stay. Over the past couple of years, how people changed their ways around shopping and paying for things wasn’t so much a change that was forced upon the masses but rather an accelerant of what was to transpire over the next decade. Tech companies had insight into this for well over a decade. NFC, digital wallets, and POS equipment to process cashless payments are inventions of the past two years. They’ve just been adopted at a much fast pace during that time.
So as we have more and more customers ordering online and experiencing that convenience, not many are going back to pulling out their wallets. Instead, businesses must adapt to this changing environment and be able to facilitate transactions via a growing number of payment options. Many of those options may start becoming more mainstream as some of the risks that get them classified as high-risk are managed and mitigated away by awareness, training, and technology.
Hybrid AI
In his book, Zero to One, Peter Thiel writes that when he started PayPal, he was losing $10 million per month to credit card fraud. To combat this, some of their brightest mathematicians studied data on actual fraudulent transactions to mine for patterns they write code for to automate the detection and prevention of. That code worked for about a few hours before the hackers found a workaround. Eventually, PayPal decided to adopt a hybrid model in which the software identified the red flags, and humans decided on their legitimacy. That was over two decades ago.
Today, influential third-party vendors are designing AI specifically for the fintech industry. However, it too is expected to work best in tandem with humans skillfully trained on actual risks associated with high-risk merchants. AI and well-trained teams will be the future of detecting and combating threats, decreasing the cost of fraud detection, limiting their occurrences, and allowing companies to focus on their core competencies.
Growth in eCommerce in the US has accelerated at a tremendous pace over the past two years. Growth in 2021 clocked in at over 14%. eCommerce was 13% of all retail sales as of the fourth quarter of 2021, according to the US Department of Commerce.
Merchants should not ignore these numbers since payment processors, security experts, hackers, and bad actors will not. The trend towards noncash and online transactions grows, as does the potential for criminal activity, especially in eCommerce, and payments are growing and fluid industries and ripe for fraud.
Understandably, the security aspect of businesses will need to strike a balance between these concerns and the customer journey. On the one hand, there is the potential of criminal activity targeting unsuspecting customers in various ways, costing both businesses and their customers. However, on the other hand, you have onerous security constraints stifling the transaction, disillusioning customers used to one-click ordering.
As a result of these dynamics, below are some best practices that merchants should consider implementing to mitigate the risks posed by fraud in eCommerce to offer a frictionless consumer experience.
What are some types of eCommerce frauds?
Let’s begin with the various types of fraud prevalent in eCommerce.
Phishing is a common scam for any business, not just eCommerce. Phishing occurs when somebody poses to be a person they aren’t for team members to disclose vital information the company has on file, including credit card information, login credentials, passwords, and a host of other personal identification about their customers. Fraudsters work to gather as much data as possible to build a profile of as many consumers as possible to carry out identity theft, among other nefarious activities.
A phisher may contact an eCommerce store pretending to call from a bank to verify suspicious account activity arising from their platform. According to research, merchants are best served when they continuously raise awareness of phishing activities among their teams and have an ongoing program to test them with mock phishing attacks. Ensuring that team members are appropriately and constantly trained to handle such calls or events can save time, money, and reputation.
Chargeback Fraud – This type of fraud occurs when a person makes an eCommerce purchase, receives the goods ordered, and proceeds to file a claim that their card has been stolen to have the merchant reverse the charge to their credit card. For merchants, this type of fraud is one of the most complex and challenging types of fraudulent activity to protect against. Nonetheless, with appropriate safeguards in place and sufficient training for the team on the correct security protocols, many of these occurrences can be avoided, successfully contested, or avoided altogether.
There are other long-term costs of unchecked weaknesses against chargeback fraud. Merchant service providers determine the riskiness of a merchant based on the susceptibility to or actual history of chargebacks. If a business is classified as high-risk due to chargeback history, fraudulent or not, the merchant will end up paying higher chargeback and payment processing fees.
Are there any warning signs?
Increasingly, eCommerce fraud is conducted by skilled technology experts who understand the latest technology, safeguards, and best practices. However, there are certain warning signs and clues that fraudsters leave behind. Below are some warning signs to look for.
Check for the billing address to not match the shipping address.
The merchant can also call the issuing bank to confirm client details and verify with the card owner if they were the ones who placed the order. It’s a cumbersome process but better than the alternative of a shipped product and recurring chargebacks.
Numerous orders are placed for the same item by the same customer.
Multiple orders are placed for different items by different credit cards but delivered to the same address.
A substantial uptick in order flows.
Look out for a sudden increase in international transactions.
Are there tools available to help prevent eCommerce frauds?
Merchants have numerous tools at their disposal to combat eCommerce fraud. They can start with some of the below options.
Employee engagement is one of the best techniques to reduce security occurrences. Raising the awareness of security risks among your team members pays enormous dividends. Training against phishing techniques helps with not just fraudulent activity in eCommerce but business in general by safeguarding trade secrets. A well-trained team on the front lines of business operations can be the best defense in detecting and resolving fraudulent threats.
Technological tools – Beyond training, it is best to arm team members with the latest specialized tools, such as predictive analytics, which include systematic risk matrixes on a transaction’s nature to gauge the likelihood of fraud.
Large online retailers, merchant account providers, and financial institutions often scrutinize billions of transactions to model appropriate transactions versus fraudulent ones using factors such as IP Geolocation, device history, address verification, card security codes, user profiles, IP geolocation, and transaction logs, among many other.
These technologies are a robust line of defense, and any activity they flag should be escalated to threat analysts for human decision-making.
The ease and safety of eCommerce have been touted over the past couple of years, with eCommerce growing 14% in 2021. It is near an all-time peak of nearly 13% of all retail sales at the end of the year. But merchants need to be vigilant of the various fraudulent activities that eCommerce may be susceptible to and ensure that they can protect against loss of business and loyal customers.
Protection against fraud in eCommerce can be complicated. Merchants are constantly trying to strike a balance between convenience and security. The essential first step is recognizing that preventable risks can be tackled, although there aren’t any guarantees that these preventive measures are a panacea. Nonetheless, these are the necessary precautions needed from merchants for consumers’ confidence to develop on your platform. It showcases a merchant’s commitment that data safeguards are taken seriously.
