Protecting the way we pay online
Why convience over security can leave us open to fraud
The internet has transformed the way we bank. We are now able to make payments, check our bank statements and arrange direct debits without ever needing to set foot in a branch.
According to David Poole, business development director of myPINpad, (a technology provider of multi-factor solutions for unsecured devices such as mobile phones and tablets), banking app log-ins increased by 50% between 2014 and 2015, whilst the average bank visits have fallen 32% since 2011.
His opinion piece in SC Magazine also reveals that online retail sales experienced an 11% year-on-year increase in 2015, with approximately £114 billion spent online. This figure is set to rise to £126 billion in 2016.
But making a payment or paying for goods and services can be a ‘pain point' for many consumers, with difficult, complex payment processes often resulting in shoppers abandoning their online shopping baskets. Consumers don't want to have to keep entering their card details, going through numerous steps of verification and having to remember a number of different passwords.
To alleviate this, ecommerce companies have simplified their payment processes, preferring to offer frictionless one-click payments and accepting a degree of risk rather than implement tough or awkward security. Services such as Amazon Prime and Uber have adopted a similar strategy and have reaped the rewards. However, the pursuit of one-click payments has inevitably made the payments process less secure and has increasingly left their customers open to fraud.
Earlier this year myPINpad published a report which showed that consumers would happily welcome and adopt certain authentication processes to make the transaction more secure. The report, based on consumer research, showed that 85% would like to be notified, of a high value transaction they had carried out and then authorise it by entering their card PIN.
Poole believes the industry has become focused on reducing, or even removing, any level of friction in the payments process, with one company even introducing ‘zero-click' ordering. However, consumers are now aware of the risks that these new payment methods pose and would like to be protected.
Balancing security and convenience is not easy, but that does not mean that security should be compromised. Authentication solutions needs to be simple enough not to inconvenience the consumer, but secure enough to protect against fraud.
To read the feature in full visit: http://www.scmagazineuk.com/why-some-friction-in-the-payment-process-can-be-a-good-thing/article/519759/