How smart card payment solutions help prevent fraud and increase conversions

Card payment solutions have become central to how businesses operate in a digital economy. As payment volumes increase, so do attempts at fraud. Yet global data shows meaningful progress: payment card fraud losses per USD 100 in total sales have stabilised at 6.8 cents, down from a peak of 7.2 cents in 2016. Much of this improvement is attributed to the widespread use of EMV smart cards, which have made counterfeit fraud less viable. Over 70% of banks worldwide have adopted smart card technology, underscoring its effectiveness in securing payments and improving trust.

Where fraud and friction happen in the card payment process

A typical card transaction moves through several layers: authentication, authorisation, clearing, and settlement. Each stage presents potential failure points. Fraudsters may exploit weak identity checks or card-not-present transactions, while genuine customers may encounter unnecessary friction such as repeated 3D Secure (3DS) challenges or form errors.

Common sources of loss and friction include:

• Fraud filters that are too strict, causing false declines.
• Issuer declines triggered by poor routing or lack of local acquiring.
• 3DS authentication challenges that add time and complexity.
• Checkout form errors that frustrate buyers and reduce conversions.
• Network or latency issues that disrupt secure payment sessions.

The payments industry has seen fraud evolve from stolen physical cards to sophisticated digital theft, including identity fraud and test-card attacks. Financial institutions now focus on layered defences that detect fraud in real time while preserving a positive customer experience.

Layered approach to matching risk to friction

No single tool can prevent payment fraud. Effective card payment solutions combine several layers, each tailored to a different risk level.

• Low-friction layer: Early checks such as address verification service (AVS) and CVV verification confirm cardholder legitimacy with minimal impact. Device and behavioural data provide subtle signals to detect anomalies without interrupting the payment flow.
• Data security layer: Tokenisation replaces sensitive card data with secure tokens, reducing exposure in case of breaches. Network tokens keep information current even when cards are reissued, maintaining continuous payment capability while reducing PCI scope.
• Step-up layer: When risk is detected, risk-based 3DS provides selective authentication, applying additional verification only when necessary. This enables liability shift benefits while maintaining smooth approval for trusted transactions.
• Cross-device layer: Scan-to-Link or similar features connect experiences across devices. For example, users scanning a QR code on a TV or console can authenticate securely via their mobile device, eliminating manual entry and lowering the risk of form-based errors.

In Japan, where card fraud rose by 30%, biometric smart card pilots using fingerprint authentication are improving both fraud prevention and customer trust. With contactless payments expected to reach USD 870 billion in value by 2028, biometric smart cards and token-based protection are likely to become standard.

Reducing checkout friction: 10 UX rules

Checkout design strongly influences conversion rates. Following these 10 UX rules can significantly reduce drop-offs during card transactions:

1. Enable autofill and card scanning for faster entry.
2. Display digital wallet buttons like Alipay or GrabPay prominently.
3. Keep required fields minimal: name, card, expiry, and CVC only.
4. Show clear error messages with auto-focus on the affected field.
5. Detect card type in real time for instant user feedback.
6. Set smart defaults for country and currency fields.
7. Use one clear call to action without secondary links.
8. Display visible trust markers (HTTPS, familiar logos) for reassurance.
9. Reveal total cost early to avoid surprises at confirmation.
10. Optimise for speed: use resilient forms that retry on connection loss.

Each of these rules reduces friction and aligns with secure payment best practices. A fast, predictable checkout boosts both confidence and completion rates.

Improving approval rates with smarter routing and retries

Even legitimate card transactions can fail due to poor routing or timing. Smarter routing systems identify optimal acquirers for each transaction type, improving approval rates and reducing costs. Local acquiring is particularly effective for cross-border merchants, as it aligns with issuer preferences and regulatory norms.

Advanced retry systems also contribute to recovery. Time-based and payday-aware retries reattempt failed payments at optimal intervals to recover previously failed payments. Pre-charge evaluations—such as checking available balance or prompting top-ups—reduce declines before they happen. Subscription and auto debit systems rely on these features to maintain consistent revenue streams without manual intervention.

In Asia-Pacific, where e-commerce represents 64% of global online spending, smart card and EMV adoption has supported acceptance rates of over 75% despite higher baseline chargeback rates of around 3.6%.

KPIs for continuous optimisation

To manage payment performance effectively, businesses should monitor both fraud control and conversion outcomes. The table below outlines key indicators and their relevance.

Tracking these KPIs allows teams to identify patterns and adjust fraud rules or routing strategies. Financial institutions increasingly use real-time dashboards to detect anomalies early and optimise secure transactions without adding friction.

Implementation roadmap

Building smarter payment systems requires structure and testing. A simple staged approach helps teams progress efficiently:

• Week 1: Audit fraud rules, card payment flows, and reporting coverage.
• Weeks 2–4: Integrate tokenisation, risk-based 3DS, and retry mechanisms.
• Weeks 5–6: Conduct A/B tests by region or card type to measure results.
• Week 7 onward: Fine-tune risk thresholds, routing decisions, and retry windows.

Incremental improvements yield consistent gains without disrupting existing payment infrastructure.

Conclusion

Smart card payment solutions have become a cornerstone of fraud prevention and transaction efficiency. Combining biometric authentication, tokenisation, and adaptive security helps financial institutions protect both merchants and consumers while keeping friction low. Providers like Antom continue to support these principles, helping businesses achieve secure, real-time, and reliable payments globally.