Slow check-out and customer friction cost too much – it’s time to change

A recent article in Forbes magazine reported that German and Austrian consumers are among the most reluctant in the world to use digital channels for payment, owing to a fear of fraud and slow check-out times, including complex authentications. Further amplifying these findings, research published by Payments Cards & Mobile shows almost one in three (32%) e-commerce transactions in Germany fail because of high consumer friction or complicated checkout processes.

As fraud risk rises, we believe that upgrading transaction security is critical to maintaining business confidence and the potential for growth in digital banking channels. With these points in mind, here are two simple steps banks can take to improve authentication rates and drive higher consumer usage of their payment products – which leads, in turn, to higher revenues:

Since the introduction of the EU’s Strong Customer Authentication (SCA) protocols as part of the second payment services directive (PSD2), EMV 3D-Secure (3DS) authentication methodologies have grown fast in popularity. However, research from the British Retail Consortium (BRC) shows that while 4 in 5 laptop transactions across Europe complete successfully, just 37% of mobile transactions end in completion – at a time when mobile is becoming the biggest channel for digital commerce.

Combining RBA and OOB can address the degree of user dissatisfaction within the authentication processes, creating a compelling authentication experience.

Using Risk-Based Authentication (RBA), which enables frictionless flows, means that the consumer is authenticated silently in the background. A risk tool compares the payment with previous shopping data within milliseconds. Out-of-Band adds another layer of security, bringing maximum safety and the highest user experience. The consumer confirms the payment on its device with a single click.

Netcetera 3-D Secure Issuer Service clients use some of the most advanced authentication tools, such as RiskShield by Inform. It assesses the level of risk for transactions in milliseconds suggesting the appropriate response.