For an industry that places a high priority on customer experience, it is crucial to listen to what cardholders are saying about their authentication preferences – especially during online payments. For instance, sticking with longstanding, legacy methods like one-time passcodes (OTPs) to authenticate customers in a 3-D Secure (3DS) flow, and not listening to customers’ preferences, comes at a cost.
For one, financial institutions (FIs) put their customers at risk as fraudsters grow more adept at manipulating and exploiting them. Secondly, these providers risk slipping down the popularity list as modern, familiar authentication methods, like biometrics, become the preference for many consumers.
In this blog, we explore three trends in 3-D Secure authentication that can put banks and card issuers more in tune with their customers, and how modern solutions can increase transaction success and reduce fraud, without interrupting the customer’s buying journey.
For one, financial institutions (FIs) put their customers at risk as fraudsters grow more adept at manipulating and exploiting them. Secondly, these providers risk slipping down the popularity list as modern, familiar authentication methods, like biometrics, become the preference for many consumers.
In this blog, we explore three trends in 3-D Secure authentication that can put banks and card issuers more in tune with their customers, and how modern solutions can increase transaction success and reduce fraud, without interrupting the customer’s buying journey.
1. Consumers prefer biometric authentication
Today, most consumers use biometric authentication every day to open and operate apps on their mobile devices and browsers. This method of verifying their identity has become so commonplace that an app or website which uses clunky, outdated authentication tools causes immediate frustration. And, in the case of online payments – cart abandonment or even customer attrition.
According to a Visa poll, 86% of respondents preferred using biometrics rather than passwords to authenticate their identity.
In our own research, in partnership with PYMNTS, the findings also support a preference for biometrics. In the report, 52% of those surveyed who use biometric authentication methods prefer that technology over any other authentication method.
Along with the convenience consumers expect from their banking and payment experience, they also value the added security that biometrics offers over easily phishable OTPs. In fact, in a Visa survey, 46% agreed that biometric systems are more secure than passwords or PINs. If a cardholder is making higher-risk transactions like instant or real-time payments (that are irrevocable), the security and seamless user experience of biometrics is essential.
Along with the convenience consumers expect from their banking and payment experience, they also value the added security that biometrics offers over easily phishable OTPs. In fact, in a Visa survey, 46% agreed that biometric systems are more secure than passwords or PINs. If a cardholder is making higher-risk transactions like instant or real-time payments (that are irrevocable), the security and seamless user experience of biometrics is essential.
2. Mobile banking is on the rise, and the need for digital payment security
Global population growth, urbanization, and rapid advances in technology are making banking services more accessible and changing how consumers use them – with customers demanding anytime, anywhere access.
Mobile banking is the first choice of 48% of U.S. consumers for managing their bank account according to the American Bankers Association.
Along with the growing number of mobile banking users, the user adoption of mobile payments is naturally on the rise too, with over 87% of mobile internet users in China using mobile payments, for instance.
Luckily, innovation in digital payment technology, like peer-to-peer (P2P) or digital wallet payments, are mirrored by new ways to secure these transactions, like face biometrics. According to researchers, face authentication is the first choice of 70% of consumers for mobile banking.
Luckily, innovation in digital payment technology, like peer-to-peer (P2P) or digital wallet payments, are mirrored by new ways to secure these transactions, like face biometrics. According to researchers, face authentication is the first choice of 70% of consumers for mobile banking.
3. Poor digital payment UX causes frustration and lost revenue
To remain competitive, leading institutions focus equally on the security and user experience of payment authentication. According to a study by the FIDO Alliance on the growing need for password alternatives, “the negative impact caused by legacy user authentication was also revealed to be getting worse.”
"Poor online experiences are ultimately hitting businesses’ bottom lines and causing frustration among consumers." – FIDO Alliance
Here are a few eye-opening statistics they share regarding the inconvenience of passwords and how they impede a seamless user experience:
- 59% of respondents gave up accessing an online service
- 43% abandoned a purchase in the last 60 days
- 70% had to reset and recover their passwords in the last two months because they’d forgotten them
Reduce payment and banking fraud, friction and false declines with Entersekt
Entersekt can help futureproof your 3-D Secure ACS by replacing ineffective authentication methods like OTPs with modern authentication measures that keep fraudsters out by adding customer-preferred authentication, like biometrics, plus risk intelligence solutions.
Gain a more complete and context-rich risk profile for each customer and deliver the right level of security in the moment, with a smooth user experience. Because, by tuning in to what customers want, you can reduce fraud, false declines, and friction during checkout.
Gain a more complete and context-rich risk profile for each customer and deliver the right level of security in the moment, with a smooth user experience. Because, by tuning in to what customers want, you can reduce fraud, false declines, and friction during checkout.
Learn more about futureproofing your ACS with modern authentication from Entersekt.
