COVID-19 has made an identifiable impact on the way consumers are making payments. Some of these changes have been enforced by the physical and structural challenges of coping with day-to-day life during the pandemic; this has caused a greater reliance on eCommerce while shops are closed and the move to contactless payments.
Paysafe’s recent Lost in Transaction (LiT) research of over 10,000 global consumers shows that COVID-19 has made a tangible impact on their priorities when making a payment. When we take a closer look at which priorities are more significantly affected, a clear pattern emerges across every country surveyed. Security is the top factor that has grown in importance for the majority of people, followed by the potential associated costs of making a transaction. Over one third (34%) of consumers in the LiT survey said that protection against loss from fraud had become more important to them following the outbreak and close to the same number (32%) said that ensuring their financial data was kept secure from fraudsters was a growing concern.
The convenience of online payments has become a more pressing priority for some consumers, including the speed of completion and the ease of the checkout user experience. However, globally, consumers are more focused on security concerns in payments compared to convenience factors.
The imbalance of security and convenience
The overwhelming majority of consumers believe that the balance between security and improved user experience is off. Less than one-fifth agreed that the balance between security, convenience, and fraud protection was satisfactory, while 82% that said they were not satisfied, and only 5% said that this was because they wanted a more frictionless checkout experience even if this increased the probability of fraud.
Over three quarters (76%) of LiT consumers said that they would be in favor of tightening current security protocols, even if it meant compromising on the convenience of the checkout experience. A quarter of consumers were in favor of doing this minimally, but over half of all the consumers surveyed said that now they would accept whatever security measures would be needed to eradicate fraud, even if this had a severely detrimental impact on the checkout experience. This percentage was consistent across all countries, with only the US (48%) falling marginally short of half of all consumers.
Overall, it is clear that for consumers security is the greater priority over convenience, and that this trend has been amplified by COVID-19. This is reflected in many consumer attitudes to the security of payments generally, beginning with the perceived risk associated with eCommerce. 56% of consumers said that they accept there is a risk of being a victim of fraud if they shop online, and 48% said they are more concerned about being a victim of fraud than they were a year ago. Only a third of consumers are more confident in the security of online payments than card-present payments.
But this focus on security does not automatically mean that convenience has to be compromised. 48% of consumers said they did not feel comfortable entering their financial details online to pay on an unknown website, but 68% said that they were more likely to shop with businesses where their financial details had already been securely stored.
Diversifying the payment methods available in the checkout is another way businesses can cater to these consumers that do not feel safe entering their financial details and that prioritize safety over convenience. Payment methods where the consumer’s financial details are not shared with the merchant are particularly favored; 75% of consumers said they were more comfortable using a digital wallet to make a payment online and 56% said they felt more comfortable using a prepaid card or voucher where their financial details were not shared.
Is biometrics the answer?
One further security improvement worth considering is the introduction of biometric payment authentication, particularly when it comes to merchant commerce. But while there is some support for this more convenient method of payment verification, consumers are still somewhat concerned that this level of security is not strong enough to protect their financial data. Although 53% of consumers do think that biometric authentication makes payments more secure, 41% said they trust manual passwords more than biometrics and 59% said they feel anxious when they aren’t asked to provide a password when making a payment. So as online businesses continue to develop their mCommerce platform, educating consumers on the security, as well as the convenience, benefits of biometric authentication will be imperative.
As we begin to emerge on the other side of the pandemic, businesses will be desperate to reclaim much of the commercial ground they may have lost throughout the first half of the year. But while making the shopping experience as frictionless as possible might initially appear to be a sure-fire way to boost sales, a slick shopping experience that leaves the customer concerned about the security of their financial data will have the opposite effect.82% of consumers are not happy with the balance between #security, convenience and #fraud protection in online payments. #respectdataClick to Tweet
eCommerce and mCommerce businesses have long sought after the most convenient user experience, but with consumers now being more focused than ever on the security of their financial data this will be easier said than done. But there are solutions, including promoting alternative payment methods where financial details are not shared, and biometric authentication. Understanding how these can shift the perception of security vs. convenience in the eyes of consumers is vital.