A report by Paysafe, a global payment solutions provider, suggests that the shift towards ‘frictionless’ payments – i.e. invisible transactions that take place ‘behind the scenes’ in apps – is being held back by consumer concerns over security and data privacy. Lost in Transaction found that half of the consumers it surveyed, in the UK, US, Canada, Germany and Austria, said fraud is the biggest barrier to using them and almost half also expressed concerns around the use of their data. A further two-thirds of consumers think voice-activated systems are not secure and a similar percentage also worry about being overcharged if they use this type of service. Many consumers – 56 per cent – also think checkout-free stores – where smart technologies record the shopping basket and automate payments – sound too risky, or they’d need to know more before using them.
Considering the level of mistrust in frictionless payment technologies, it's not surprising that the study found that cash continues to thrive as the most common form of payment, with 87 per cent of consumers using it in the past month to make a purchase. It also found that the majority – 83 per cent – of consumers visited ATMs in the last month, while 41 per cent of consumers are not interested in hearing about cash alternatives. This, says Paysafe, is a clear indication of the ongoing influence of cash.
Paysafe's Oscar Nieboer said: “Despite the apparent benefits of low-friction payment technologies, these findings suggest many consumers aren’t ready to lose visibility of the payment process. It’s clear that the benefits are not unilaterally agreed upon, with cultural and infrastructure trends at play, and it may be some time before adoption is widespread. In the meantime, there’s a need to continue servicing the cash consumer.”
Some of the other key takeaways from the report include:
- The UK leads the world in contactless shopping, with 54% of consumers using it in the last month – compared to just 3% of US shoppers.
- 50% of survey respondents used a digital wallet such as Skrill or NETELLER for online purchases, more than either credit or debit cards. But in Austria and Germany, payment by invoice is more popular than card payments too, used by 38% of Austrians and 29% of Germans.
- Just 9% of consumers use mobile wallets for shopping in-store, due to a lack of awareness and scepticism about security and convenience. But usage for payments is high among smartphone owners, at 44%.
- Only 23% of consumers have used frictionless payments in apps such as Uber, despite widespread awareness. At the same time, only 18% of respondents use voice-activated payments systems.
- 43% of shoppers are comfortable using smart buttons to order often-used single items. But equal numbers would not do so, and only 33% would let fridges automatically re-order food.
- Canadian and UK shoppers reported a rise in fraud in 2017, of 7% and 6% respectively. Overall, though, consumers are making sensible choices when it comes to security, with 74% of people avoiding shopping on public or unsecured networks and 66% accepting the need for two-factor authentication systems.
Payments: New card technologies & cards; Open Payment Platform; UK Faster Payments; Card charges row
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