Striking the right balance between convenience and security isn't just about replacing older payment methods with new technologies. However, they're only one part of the equation. In other words, how can merchants deploy robust security that is also cost-effective and has minimal impact on the customer experience? The answer is often thought to lie in innovations such as biometrics, social media and geo-location. But how will merchants deal with the trade-off between balancing risk and revenue generation? Two thirds (69%) of UK businesses want to increase customer sign-ups and transaction volumes by reducing risk thresholds for ID verification – but how does that sit with 78% of companies wanting to produce more effective verification measures to prevent fraudulent transactions?Īndrea Dunlop, CEO Acquiring & Card Solutions, Paysafe As well as e-wallets, mobile payments and cryptocurrencies, voice-activated systems such as Amazon's Alexa and other biometric payments such as facial recognition are now in wider usage with four major banks already upgrading their apps to be more compatible with Apple's new facial recognition software.Īs alternative payment methods such as these move beyond early adoption, new types of fraud will inevitably come into play. Given fraud prevention is such a priority for consumers, this is good news because the indications are that these new payment methods also make payments more secure than more traditional payment methods such as credit cards, debit cards, and cheques. Even those who are reimbursed are likely to have a negative view of the whole experience – not just the merchant involved but the payment method used too.Į-wallets, mobile payments and even cryptocurrencies have all experienced a surge in popularity with the UK public and healthy adoption by merchants. Across those three payment channels, however, more than one in five shoppers suffer permanent losses, often running into hundreds of pounds. Of those who do fall victim to fraud, many eventually recover their losses – 82% of credit card users, 74% of bank account users and 74% of digital wallet users. This view is not borne out by the figures which indicate that only one in ten consumers abandon online shopping carts due to payment security taking too long indeed, according to 43% of UK consumers, the most significant driver of abandoned carts is their refusal to proceed due to hidden transaction fees and delivery charges. The appetite for heightened security measures to protect personal data and transactions is clear: 60% of UK consumers are willing to accept any security measures needed to eradicate fraud, while two thirds (65%) are open to the introduction of more secure payment processes such as two-factor authentication.īy contrast, less than a third (32%) of UK businesses believe their customers would tolerate heightened security, and 59% think longer verification processes increase their risk of losing customers. ![]() What is new, however, is that the majority of consumers now view fraud as an inevitable part of shopping online.Īccording to Lost in Transaction, a Paysafe research report, consumers are more educated about fraud than ever before, and fraud prevention has now escalated into being one of their top concerns when it comes to online shopping. However, is this view on consumer priorities now outdated and are online retailers judging the current mood of consumers correctly? Since the e-commerce explosion in the late 1990s, during the dot-com bubble, the web has been a fertile ground for hackers and fraudsters targeting consumers with weak security defenses. PSD2's long shadow casts doubt over US fintech security
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