The rise of digital payments, and people’s level of comfort with managing their finances remotely, has created a challenge for businesses when it comes to keeping transactions secure. But in a world where we are so accustomed to paying quickly and seamlessly, is security really a top priority for the consumer? We sat down with three FinTech organisations to find out.
“When it comes to security versus convenience in payments, what consumers value most very much depends on what product is being sold,” argues Matthieu Barral, SVP Sales at Checkout.com. “But what we do know is that consumers are willing to pay for speed, convenience and security online. Our research report ‘Black Boxes and Paradoxes’ revealed that consumers place a premium on security and are willing to pay a premium for 2-step authentication.”
However, Barral adds that retailers still need to strike a balance that matches their customers’ priorities. “The report also showed that a third of consumers would abandon their purchase if they had questions about the security of their payments. Yet in comparison, just over half were permanently put off shopping on a site because of the complexity of the payment process.”
So, while convenience is probably top of mind for the consumer when they think about their experience, this is normally because a secure service should be a given. “The problem is that merchants frequently underestimate how important security is to the consumer,” Barral adds. “With eight in 10 consumers actively looking for encryption details when making a purchase but only half of merchants providing that information, it’s clear that the trade-off between security and convenience only seems to exist from the merchants’ perspective.”
Paul Hampton, FinTech Security Expert at Thales Group, says Covid-19 has brought about massive change to the comfort level when it comes to consumer payments, which is a positive sign, but FinTechs must be aware of increasing customer expectation too. “The international pandemic has spurred the evolution of consumer payment methods with more people shopping online than ever before due to lockdown restrictions,” he comments. “Coupled with social distancing measures and concerns around hand hygiene have people are increasingly opting for contactless mobile payments when in store.”
Hampton adds that smartphone spending has become the biggest payments trend of 2020, with the Worldpay Global Payments Report finding that this year more than one billion shoppers are expected to make a mobile payment. “While the rise of mobile payments has become a game changes for tech companies, retailers and financial services, they must constantly evolve to meet the expectations of digitally-savvy customers,” he explains.
“This isn’t just about improving the customer experience but gaining the trust of users by installing strong security and authentication controls that use biometric, behavioural and location data. Ensuring that the right protection measures are in place has enabled customers to feel safe making payments online and accelerated the growth of mobile spending.”
Melanie Maier, pre-sales solution lead at global FinTech authentication business Entersekt, says that while comfort levels when it comes to digital payments have changed over the years, this attitude isn’t solely dependent on age. “Growing up with tech giants Google, Twitter, Amazon and Facebook, it’s understandable that Gen Z and Millennials take frictionless exchanges and personalised experiences for granted. Each one of us, however, is unique, and for us to be able to express and celebrate our uniqueness, there need to be choices and the freedom to choose,” she comments.
For financial institutions providing that choice is vital. “To their credit, some FIs have started to adopt a more digital focus with different communication and transaction streams, but a frequent stumbling block seems to be the disconnect between the channels, with certain services being available only on some channels and different authentication methods being requested for different channels. These inconsistencies detract from a customer’s experience and call into question the security of each channel.”
The answer? Developing a truly “omnichannel” experience, as we are already moving toward as businesses seek to serve customers through various pathways. “Simply having multiple options through which a customer can interact with their bank is no longer enough,” Maier adds. “True omnichannel service delivery means more than just more ways to do the same things. It’s about creating a seamless and consistent brand interaction through multiple channels that share data and complement each other, removing the need to choose between security and convenience.”
If you’d like to learn more about the security challenges faced in payments and banking, take a look at our Seamless Identification webinar.
