Retailers Lose One-Fifth Of Customers Because They Lack Enhanced Payment Security Options
By Christine Kern, contributing writer
MasterCard’s Selfie Verification pilot program could revolutionize online transactions
New data from Acquity Group and Walker Sands shows the value consumers place on payment security, supporting the potential for MasterCard’s selfie verification idea in reaching mainstream adoption.
Consumers now have higher expectations than ever before from their online and brick-and-mortar retailers, meaning that retailers must make research intuitive and delivery instantaneous, according to Acquity Group's 2015 Next Generation of Commerce Study.
The study also stated, “Innovations across the media, social, and fulfillment landscapes have allowed consumers of all ages to step into a new generation of commerce – once that prioritizes convenience, where time and quality of experience are highly valued, and the shopping experience extends far beyond the traditional path to purchase.”
But security is still paramount.
The study also found that retailers will lose as much as one-fifth of their customers (21 percent) as a result of not offering enhanced payment security measures such as a finger print or other biometric sensors for mobile shopping.
Nearly 1 in 5 shoppers (19 percent) have been the victim of fraudulent purchases as a result of a security breach at a major retailer, and victims of such events are far more likely to stop shopping with a retailer that has experienced a breach.
The Walker Sands' 2015 Future of Retail Study found that more confidence in payment security would make half of consumers more likely to shop online (48 percent in 2014 vs 42 percent in 2013). The study found that eight out of 10 consumers still experience hesitancy about using mobile payment services, with 57 percent concerned about security and 48 percent reporting privacy issues as their top obstacle.
And while 56 percent of consumers rated cash as the most secure form of payment, only 11 percent have paid cash for something in the past day, compared with 27 percent last year. The majority of consumers (59 percent) reported carrying $20 or less in their wallets.
And despite the fact that nearly one in five shoppers have experienced fraud as a result of a security breach at a major retailer, consumers still rank credit cards (22 percent) and debit cards (16 percent) as the second and third most secure forms of payments behind cash.
Emerging technology will provide both new opportunities and new challenges for retailers. MasterCard’s selfie verification idea could revolutionize how consumers secure their online transaction processes. What began as an idea by one credit card company could mark as the next big solution to online payment security.
Beginning this Fall, MasterCard is introducing a new program that approves online purchases with a facial scan. As Ajay Bhalla of MasterCard told CNN, “The new generation, which is into selfies…I think they’ll find it cool. They’ll embrace it.”
Bhalla is in charge of developing innovation security solutions for the credit card company. He explained, “This is MasterCard’s way of cutting down fraud.”
Partnering with smartphone makers Apple, BlackBerry, Google, Microsoft, and Samsung, the MasterCard pilot program will incorporate fingerprints and facial scans in a limited experiment with 500 customers. The company plans to launch the program publicly after the trial.
If this pilot is successful, it could mean a boon for retailers, since consumers will feel safer shopping with their credit cards.
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