For eCommerce businesses, the holiday rush stretches from Black Friday through Cyber Monday and the winter holiday season. This year, online spending in the US alone is expected to reach a record $240.8 billion for November through December, marking an 8.4% increase over 2023. Each event brings a global surge in transactions and heightened customer expectations, but it also poses unique payment challenges. To capitalize fully on these peak season opportunities, eCommerce companies must address specific, often overlooked payment complexities. In this article, we dive into the five critical challenges and expert solutions to help retailers turn peak season traffic into peak season revenue.
Managing high transaction volumes
The final quarter typically triples transaction volumes, with the season’s highest-selling days crammed into just a few weeks. For payment systems, this translates into significant demand surges, and even small delays can result in abandoned carts and revenue loss—an expensive risk during high-traffic times.
A scalable, cloud-based payment orchestration platform is essential for handling large transaction spikes. By using load balancing across multiple acquirers, Nuvei’s payment orchestration solution optimizes transaction speed, minimizes processing delays, and ensures that payment infrastructure scales to handle peak demand. This way, businesses can capitalize on holiday traffic without compromising performance or sales.
Balancing fraud prevention and minimizing false declines
As transaction volumes rise, so does the risk of fraud. During Black Friday and Cyber Monday, online fraud losses are reported to spike by 22%, with over $40 billion spent online in the same period. However, false declines—legitimate transactions mistakenly flagged as fraud—also increase, potentially costing merchants even more than true fraud. Last year alone, false declines led to $308 billion in lost revenue worldwide, with 11% of all eCommerce transactions being declined. This issue becomes even more costly during peak season, as higher transaction volumes amplify the impact of lost sales.
Nuvei’s fraud tools use AI-driven, real-time transaction scoring to effectively combat fraud without disproportionately impacting genuine customers. Adaptive fraud management combines risk-based authentication, allowing low-risk transactions to proceed while scrutinizing higher-risk ones. Network tokenization further reduces fraud by 26%, ensuring that false declines don’t undermine sales during peak season.
Catering to cross-border and multi-currency shoppers
Cross-border shopping has become a major factor in holiday eCommerce, with 57% of consumers now shopping internationally. 92% of consumers prefer to make purchases on sites that price in their local currency. When international customers are presented only with foreign currencies or unfamiliar payment methods, cart abandonment often follows due to exchange rate concerns or hidden fees.
To provide a transparent experience, Dynamic Currency Conversion (DCC) and multi-currency support are crucial. These allow shoppers to view and pay in their preferred currency, reducing cart abandonment by eliminating surprises at checkout. Nuvei’s platform supports 150 currencies, delivering localized pricing and building trust with international customers. Localizing payment experiences increases conversion rates and can drive up to 20% more revenue, as customers feel more confident and comfortable finalizing purchases in their own currency.
Maximizing authorization rates and eliminating soft declines
Declined transactions can rise during peak season not only due to fraud, but also due to network congestion, issuer constraints, or insufficient funds as customers overspend. Data shows that 62% of customers abandon their purchase after a single decline, highlighting the critical need for effective authorization optimization measures during high-traffic periods.
Nuvei’s smart routing technology increases transaction approvals by up to 5% by directing transactions through the best-performing acquirer based on real-time factors like network conditions and acquirer preferences. This technology identifies the most likely path for each transaction to succeed, ensuring maximum approval potential. Decline cascading is an added layer that boosts revenue by up to 3%. It increases approval rates by re-routing declined transactions through alternate acquirers, offering additional chances for successful authorization. Additionally, partial approvals allow customers to proceed with lower payment amounts if funds are insufficient, which reduces cart abandonment. Nuvei’s extensive acquiring network in 200+ markets and direct local acquiring in 50 markets ensures that transactions are routed through the most efficient channels almost anywhere in the world, significantly improving authorization rates.
An advanced analytics suite provides real-time, AI-driven insights to further fine-tune payment processes. By automating approval rate analysis and providing customizable reports, retailers gain visibility into transaction performance, allowing them to optimize authorizations strategically. Through these data-backed solutions, businesses have reported up to a 19% increase in revenue by converting potentially lost sales into approvals, enhancing profitability during the busiest time of the year.
Offering diverse payment methods for all customer preferences
Today’s customers, especially younger and mobile-first shoppers, increasingly expect flexibility in payment methods. Forecasts show that mobile revenue will account for 53.2% of holiday sales, reflecting a strong preference for digital wallets, BNPL (Buy Now, Pay Later), and other mobile-friendly payment options. Limited payment choices can lead to cart abandonment, as customers seek faster, more accessible options.
Nuvei’s extensive APM suite, which includes digital wallets, BNPL, and even cryptocurrency options, provides the flexibility today’s customers expect. By offering a wide range of payment methods, retailers cater to a broader audience and enhance the overall customer experience, allowing each shopper to use their preferred payment method. This approach reduces cart abandonment and improves conversion rates, creating a seamless and efficient payment experience.
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