Can Payments Be Both Secure and Convenient? Consumers Don't Think So

Can Payments Be Both Secure and Convenient? Consumers Don't Think So

Can Payments Be Both Secure and Convenient? Consumers Don't Think So

Jonathan O'Connor

Jonathan O'Connor

Jonathan O’Connor translates data into compelling stories as a part of the payment insights team at Auriemma Consulting Group, a boutique management firm specializing in the payments and lending space.

More Info

The challenge: make payments more secure, but also make them faster, better, easier and, overall, more convenient. It's a Catch-22 issuers still ponder with some solutions prioritizing one over the other, but perhaps not for long.

One thing is certain: Consumers don't like card fraud, and the majority feel it has increased in the past year, despite the mass EMV/chip card rollout. The fact is that consumers don't believe their bank can fully protect them from card fraud, according to Auriemma Consulting Group's (ACG) recent study on the relationship between card security and convenience. This isn't to say that consumers aren't confident in issuers protecting them from card fraud; they are, but most don't feel issuers' efforts are very effective. If that sounds confusing, read on.

Inconsistent viewpoints

Yes, consumers say fraud protection features like two-step authentication and the ability to freeze and unfreeze a card are somewhat effective, but a rather small proportion, by comparison, believe fraud protection features are very effective. Maybe this is because four in 10 consumers have been touched by fraud in some way — and more than half of them multiple times.

But what does this mean for issuers? Most consumers likely believe that fraudsters will find a way to get their card information, no matter what security measures are in place. Issuers, then, are responsible for changing this perception by both communicating with and educating their customers on how they can utilize the tools they are provided and some common sense to avoid card fraud.

The good news is that although consumers do not appear to have unyielding confidence in fraud-prevention measures, they are satisfied with remediation efforts taken, particularly by banks and issuers, who most credit and debit cardholders contact after experiencing a fraud event. Customer support ratings from these contacts is high, with three-fourths saying they were very satisfied with the resolution to their fraud issue, and almost all consumers saying they were at least somewhat satisfied.

Convenience and security: striking the balance

Consumers often seem to equate increased speed with decreased security, creating an interesting education challenge for issuers aiming to give them both. Newer payment options, like Amazon 1-Click ordering, do just that, combining the convenience of a quick payment experience with the same security consumers get when using Amazon’s more traditional checkout method. Although most consumers (60 percent) have yet to use Amazon 1-Click, about nine in 10 of those who have used it were satisfied, but interest is low among those who have yet to use the method. Why? While 64 percent of consumers think one-click payments make the payment process more enjoyable, a near equal proportion believe they will make online shopping more vulnerable to fraud. Two things are revealed here — consumers want faster, more enjoyable payments, but they hesitate to try solutions created to give them that experience because they believe speed and security can't co-exist. And when consumers believe they can’t have both, they say security wins out, but they don't always act that way.

When asked about two-step authentication, most familiar consumers, more than seven in 10, say they would enable it every chance they got. Even so, four in 10 believe it is more effort than it's worth, highlighting the importance of convenience not being sacrificed for security. But here is where the "easier/faster/better equals less secure" logic falls apart.

Those who want two-step authentication most often select security questions as the second layer instead of more secure options such as biometric authentication and texting a unique code to their phone. Consumers likely select this option most because it is what they are accustomed to, what is easiest to remember, and involves, in their mind, the least amount of effort. Also at work could be a lack of understanding or technology aversion for some consumers. Either way, issuers again have room to educate consumers on how best to utilize fraud protection features and how these features don't need to make their payment experience much less convenient, if at all.

How purchase amount changes consumer perceptions

To better understand how consumers value security and convenience, ACG's study pitted the two against each other, asking consumers their payment preferences based on purchase amount, specifically $5 and $100 purchases. Regardless of the purchase amount, consumers handily selected "Security, even if that means longer checkout times" over "Fast, even if that means fewer security steps," although, for some consumers, the importance of security varies when comparing the two values. It seems like small purchases more often create the desire for speed, even if, overall, security reigns supreme. Of course, the amount has nothing to do with a fraudster's ability to steal a consumer's information, but it does impact consumers' behavior.

How should issuers react?

Consumers clearly value security over convenience, but want both when making payments. The trick for issuers will be balancing the two and making consumers aware that faster payments don't necessarily mean less secure ones. Although consumers are satisfied with their bank's resolution to fraud issues after they arise, banks now must examine how they socialize their various fraud protection offerings and new technologies to ensure consumers feel confident using their issuer's card.

So, do consumers buy that they can have a payment experience that is both secure and convenient? Right now, it doesn't seem so, but with the proper education issuers can show consumers the many ways they are protected against card fraud that won't have them tapping their feet at checkout.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Jonathan

Jonathan O’Connor

Jonathan O’Connor translates data into compelling stories as a part of the payment insights team at Auriemma Consulting Group, a boutique management firm specializing in the payments and lending space.

On the payment insights team, Jonathan creates reports, based on consumer research, that analyze market-shaping forces such as emerging technologies, changing behaviors and attitudes, and new market entrants. He also co-authors Auriemma's Twitter account (@auriemma_group), where followers get the latest findings from the company's studies.

Share this story via email or social networks