While COVID-19 has certainly brought its share of negative impacts, there have been some positive ones as well. Consider, for example, the accelerated transition to digital payments—as a consequence of the pandemic, a future without cash is closer than ever!
Contactless payments have been on the rise for many years, but COVID-19 definitely served as a catalyst for this trend as well. New mobile banking registrations skyrocketed by 200% in April 2020, while mobile banking traffic increased by 85%. Considering how, in the wake of the pandemic’s first phase, 88% of organizations worldwide encouraged or mandated employees to work from home, this comes as no surprise.
Moreover, Americans are increasingly likely to opt for a credit or debit card transaction instead of banknotes and coins due to fears that these could spread COVID. A full 58% of Americans suggest we move to a cashless system altogether post-pandemic. The preference for cards and digital services is primarily driven by convenience (52%), and because it is a safer (24%) and more hygienic (11%) alternative to cash. Cashless businesses are cropping up all over the US: 63% of respondents in the aforementioned survey report shopping at one.
“The preference for cards and digital services is primarily driven by convenience and because it is a safer and more hygienic alternative to cash.”
But while cash may no longer be king, electronic payment technology is not without its issues. Chief among these are concerns surrounding digital fraud. Approximately seven in ten survey respondents fear potential privacy breaches via e-commerce sites and payment apps. Meanwhile, just over half of those who prefer using cash cite security and privacy as the main reasons.
As more personal and financial data is stored on digital platforms, potential cyberattack vulnerabilities are on the increase accordingly. Digital payment solutions such as those offered by Entersekt are the answer for banks, payment providers, and businesses seeking to ramp up their security.
3D Secure payment strengthens digital payment security
Implementing payment solutions such as 3D Secure adds an additional security layer for online transactions. This is particularly important considering new EMVCo specifications to ensure seamless and secure card-not-present transactions.
Businesses worldwide first began migrating to 3D Secure authentication with EMV chip cards in the early 2000s. This eliminated most in-person credit card fraud, as stores could now easily authenticate a cardholder’s identity. However, as the online domain expanded, fraud instances simply followed over to the virtual space.
Fortunately, payment security technology followed right behind with several advancements, including to 3D Secure. In addition to speeding up and simplifying online payments, 3D Secure 2 (or EMV 3-D Secure) now also helps minimize card-not-present fraud, reduce shopping cart abandonment, increase card usage, and improve cardholder retention.
Moreover, if a third party fraudulently uses a customer’s card, 3D Secure blocks chargebacks and safeguards the business from liability.
“3D Secure helps minimize card-not-present fraud, reduce shopping cart abandonment, increase card usage, and improve cardholder retention.”
Considering that businesses still frequently use 3D Secure 1 and 2 in tandem, it’s important to have an access control server (ACS) that can handle both protocol versions with ease. Solutions like Entersekt’s can handle both protocols, thus providing support for legacy merchants that have not yet migrated from 3D Secure 1 to EMV 3-D Secure.
Entersekt’s 3D Secure solution also automatically upgrades the cardholder experience at merchants still using 3D Secure 1 to that of EMV 3-D Secure. This ensures cardholders always get the same smooth and secure e-commerce authentication experience from their issuer across all merchants.
Capitec: A study in success
The advantages of a streamlined 3D Secure payment system are evident in the experience of South African retail bank, Capitec. Faced with the challenge of replacing their inflexible outsourced system with world-class card-not-present (CNP) digital transaction services, Capitec needed a first-rate solution. This answer also needed automatic user enrollment to boost adoption, decrease branch costs, and do away with unwieldy password specifications.
As a result of partnering with Entersekt for an innovative solution, Capitec realized a 54% rise in conversion rates over their first six-month period. Transaction values also grew 149% in the first year. Capitec can now deliver a consistent and seamless user experience across all its digital channels.
Read more in our Capitec case study.
QR codes for secure digital payments
The number of QR code payment users reached 1.5 billion in 2020, and estimates expect that number to further skyrocket past 2.2 billion by 2025! It is one of the fastest-growing payment methods internationally, thanks to its status as one of the most convenient—and hygienic—methods of contactless payment available.
Apart from QR codes allowing you to handle transactions in seconds, and from multiple customers at a time, QR payments mean merchants can offer a unified payment experience across physical and online payments. It also allows them to accept payments while they are both online and offline. This feature is especially beneficial for micro or informal merchants with low or no payment acceptance infrastructure, or during power cuts, for example.
“Apart from QR codes allowing you to handle transactions in seconds, and from multiple customers at a time, QR payments mean merchants can offer a unified payment experience across physical and online payments.”
However, QR payment technology has not been without its challenges. A patchwork of QR implementations results in a messy ecosystem of multiple networks and standards that can only process their own brand of code. This underlines the importance of a one-stop QR payment acceptance solution to consolidate and improve the QR payment experience, without having to worry about third-party app downloads or wallets.
QR codes have particularly been on the upswing in South Africa. This in turn has created a demand for ways to integrate QR payment technology into banks’ digital offerings. Fintech providers like Entersekt are ready to rise to the occasion. Entersekt’s solution enables customers to make QR payments directly from their banking apps. It accepts all major QR-based brands, is easy to install, upgrade, and maintain, and offers robust security thanks to Entersekt’s strong customer authentication technology.
Nedbank—also a South African retail bank—and Capitec Bank have integrated Entersekt’s QR payment solution into their banking apps. Now, their customers can scan any QR code directly from their banking apps. No cumbersome platform switching, no additional enrollment and login processes; just one, easy-to-use payment platform that most already have access to or can easily download.
Capitec also recently launched peer-to-peer QR payments using Entersekt's technology. This allows Capitec app users to generate QR codes and pay each other from their banking apps using existing QR payments functionality. Being built on an experience their customers already know and trust has led to a simplified app, lower customer education needs, and higher feature adoption rates.
Entersekt’s customer authentication makes digital payment secure
Entersekt’s cross-channel authentication technology ensures digital payment security, as well as a seamless customer journey through integrated services. For example,
- In-app authentication on mobile devices allows for unique identification and communication over a mutually validated, end-to-end encrypted channel.
- FIDO passwordless authentication offers app-free payment authentication that is frictionless, extremely secure, and powered by a globally recognized standard.
- Entersekt also offers robust browser authentication, which combines digital certificate technology, device fingerprinting, and web-based cryptographic binding to secure browser-based interactions.
A powerful, innovative, and secure cross-channel customer authentication solution builds trust and drives customer engagement, while almost entirely eliminating fraud.
Contact Entersekt to find out how you can elevate your transaction security today!