Banking
Security vs online payment convenience: which one is tipping the scales for customers?
Published
1 year agoon
By
editorial
Chirag Patel, President of Digital Wallets at Paysafe.
While keeping their payment details safe is a top priority for customers when shopping online, they’re not willing to jump through endless hoops or accept poor user experiences as the inevitable price of greater security.
Online payment security has been top of mind for merchants since the very first internet purchase: a copy of Sting’s ‘Ten Summoner’s Tales’ CD. Even though payment technology has become more sophisticated over time, the eCommerce explosion has brought about an ongoing battle between increasing security and ensuring convenience.

Chirag
Customers are ever more aware about the risks of online shopping and concerned about their financial details falling into the wrong hands. Simultaneously, demand for a good user experience has also risen steadily. But greater security typically introduces friction into the checkout process, which continues to be one of the leading causes of cart abandonment.
In our latest Lost In Transaction report, we surveyed 11,000 consumers in 10 countries across Europe and the Americas regarding the balance between security and convenience in online payments.
Here are the key take-aways for online merchants moving forward.
How concerned are consumers about online fraud?
According to our research, customers continue to grow increasingly worried about online fraud.
59% of respondents are more concerned about it today than they were 12 months ago. Not feeling comfortable sharing financial details online has increased from 49% in 2021, to 70% in 2022.
More to the point, our research shows that, when they have a choice, 44% of respondents will invariably pay with the method they perceive as safest while only 21% will choose the most convenient payment method, and even fewer (14%) will choose the fastest one.
These findings aren’t surprising considering that fraud has become more frequent and more serious during the COVID-19 pandemic. For example, in 2021 the average US fraud victim lost $500 and the average UK victim lost £806.
However, what merchants need to keep in mind is that, even though security typically dictates the choice of payment method, there’s a limit to how much friction customers are prepared to tolerate. And our research suggests this limit is close to being reached, with 42% of customers reporting that they would prefer more payment security but only 19% open to accepting whatever measures are necessary for increased protection against fraud. The other 23% would only accept a minimal increase in inconvenience.
A fine line to walk
If you’re a merchant, the situation is positive but challenging to navigate.
Fortunately, 44% of consumers think merchants are getting the balance between security and convenience right — up from 26% in 2021 – and trust is also high. 53% think online payments are more secure than they were twelve months ago. And 64% of respondents are more likely to shop from merchants who already have their payment details on file, compared to 54% in 2021.
The challenge is that security risks are ever evolving. Cybercriminals are constantly refining their techniques, which means measures that are highly effective today can become inadequate tomorrow. And regulation is constantly developing, at times at odds with consumer sentiment. The introduction of Strong
Customer Authentication rules, for instance, sparked fears that the deliberate friction they required would hurt sales, which, admittedly, has had less of a negative impact than anticipated.
Consequently, while security enhancements are inevitable if merchants are to continue meeting high standards, there’s margin for error now that more consumers are reaching the limits of their tolerance for friction.
For every new security measure they introduce, merchants must be increasingly mindful of the impact on the streamlined payment experience customers expect.
Finding a common ground: boosting security with trust and technology
While maintaining – or even improving – the current balance between security and convenience might seem impossibly tricky, payment technology has evolved to a point where it’s doable.
With embedded payments, for instance, the consumer pays through a user-friendly interface at the point of need. And because financial details are stored securely in tokenized format, there’s no need to share them every time you make a purchase.
eCash is another such solution that enables customers to buy online quickly, securely, and privately.
A unique barcode is generated at the checkout which customers can then get scanned at one of one million points of sale in 55+ countries to pay in cash. Which means they can buy online without having to share or even store any financial details.
This presents a great opportunity for merchants to take advantage of the high levels of trust these payment solutions enjoy. While our research shows that there’s still a significant knowledge gap, particularly in embedded payments, consumers are becoming more open to both technologies. So now is the time to explain the benefits clearly to customers and, more importantly, address concerns.
Online payment security is crucial, but not at all costs
Keeping their financial details safe is the most important element of the payment process for most customers. But while fraud protection may be winning the battle against convenience hands down, merchants need to carefully navigate the process of increasing security without adding too much inconvenience.
As critical as it is for merchants to protect customers’ data, a zero-fraud strategy would also likely cause way more friction than most customers are prepared to tolerate. A smooth, seamless payment experience remains as important as ever.
Banking
Are SaaS platforms challenging banks for a piece of the payments pie?
Published
3 days agoon
September 26, 2023By
admin
Attributed to: Ralph Dangelmaier, Global CEO of BlueSnap
The finance industry is at a tipping point with software firms on the brink of becoming banks. This may seem like a farfetched idea, but now that software platforms come equipped with payment capabilities, their SME customers may want to receive more financial products from these platforms.
This is part of the wider trend of ‘embedded finance’ – when companies which aren’t banks incorporate financial services such as lending, insurance, and payments into their product.
Software firms are particularly leveraging ‘embedded payments’ – where the ability to accept and process payments comes with the software itself. Think of a school consolidating all the payments a parent would make for their children – tuition, books, extracurricular activities – in one software platform. This trend has exploded in popularity because there’s a desire among companies, and their customers, for everything from products to payments to happen under one roof.
With the market value of embedded payments expected to reach £2.08 trillion by 2026 and customers becoming increasingly married to their software, let’s look at how we ended up at this turning point in payments.
How chasing convenience puts money in platforms’ hands

Ralph Dangelmaier
The growth of embedded payments is propelled by the need for ease, trust, and convenience. As platforms are selling payments hand-in-hand with their software, customers don’t need to integrate with additional service providers just to accept payments. And they’re already bought into using the platform for its other functions.
Not only is this kind of back-end reconciliation easy and convenient but it helps software platforms generate revenue too. That’s because software companies that embed payments become Payment Facilitators (a.k.a PayFacs) – allowing them to monetize transactions that happen within their platform.
By selling payments, software firms can see up to a fivefold increase in value per client. Rather than depending on software subscriptions alone, these platforms now receive a cut of every transaction that’s facilitated using their software too. This provides them and the businesses they serve with a mutual incentive – shared profits.
Software platforms are passionate about helping their customers create the most easy-to-use experience to drive a higher volume of transactions. Of course, there are many ways to launch new revenue streams, but why leave money sitting on the table when all you have to do is become convenience-obsessed?
Why finance teams want software and payments in one
As a payment expert who’s worked in a bank’s back office, I know how important a financial software stack can be. In its highest form, it can steer a business’ entire financial strategy.
Often these stacks are well curated, but the biggest drawback is the manual collection of data across platforms. Trying to build a financial picture of a business using your ERP, CRM, human resource and billing system can involve hours of laborious data entry.
For everyday finance teams, this isn’t an efficient use of time. They need to be able to pull data swiftly to advise their executives on financial strategies. CFOs are also under pressure to choose the right software stack to streamline processes and ensure payments ROI.
That’s why payment technology that removes the manual work for finance teams – to get from A to B more quickly – is growing in popularity.
Software firms using embedded payments are saving them hassle and time. Not only that, it helps the key financial decision makers of SMEs stay in a constant state of financial planning, where they can change their strategy whatever the market conditions may be.
The end of traditional banking for SMEs?
Increasingly, SMEs are struggling to get the payments support they need from traditional banks. The ‘higher risk, lower return’ view of the small business market among banks leaves software platforms in a ripe position for a takeover.
There are over 90,000 software companies in the UK alone. With nearly half of software platforms (48%) turning to embedded payments to gain a source of competitive advantage, this figure could represent a threat to corporate banking as we know it.
SMEs don’t have the deep pockets that multinational businesses have. The Amazons and BMWs of the world have long reaped the benefits of a corporate account with a large bank – and the round the clock support this offers.
But SMEs face high conversion fees and often receive minimal support chasing late payments, leaving them between a rock and a hard place. If these businesses can save money by moving from banks to software platforms, then banks are at risk of losing their position over the middle market.
Looming regulation
Until now banks have been able to defend their position because safety and security is key. Once platforms become regulated, then what? It won’t be long before regulators eye up the software industry as their next big focus.
But regulatory bodies like the FCA, PRA and more favour ‘controlled innovation’, so this will take time.
Currently, to process transactions in Europe, businesses must go down the lengthy and costly process of becoming Payment Service Providers (PSPs). That’s why many software platforms are choosing to partner with a licensed payment provider which sells the payment package to them, instead.
In fact, 89% of software platforms choose to work with PSPs rather than become a PayFac themselves. It makes sense when it’s taken more than a year for some platforms to begin processing payments on their own.
Given the sizable financial risk of processing your own payments and the administrative burden this brings, it’s no wonder software firms are looking to fintech for a better way.
After all, it’s not just about processing the payments. A partnership with a payment technology partner comes complete with support in onboarding, underwriting, compliance, risk, payouts and customer support.
In short, software platforms see the benefits of selling payments and are primed to become the next big financial players.
Not only is there revenue for the taking but their customers benefit as well. With software platforms ready to offer SMEs a banking alternative and a superior customer experience, they’re offering a truly win-win solution for all involved. And it’s payment technology partners that can help them make this vision a reality.
Banking
Emerging technology will power long-term sustainability within the UK banking industry
Published
3 days agoon
September 26, 2023By
admin
By Peter-Jan Van De Venn, VP Global Digital Banking at Hexaware Mobiquity.
Sustainability has been a big focus for the banking industry in recent years, with the issue becoming increasingly important for consumers. It’s no wonder that sustainability has become baked into the purposes of almost every bank, from Natwest to HSBC.
However, the economic uncertainty of the last year has led to many banks putting it on the back burner. Challenging market conditions have forced financial institutions to change their priorities to concentrate on protecting the bottom line. Our research found there’s been a significant drop in the number of UK banks saying that sustainability remains a key business strategy. 12 months ago it was a major priority for 100 per cent of banks, but now that number has shrunk to 60 percent.
Whilst it’s understandable that banks are feeling the pressure at the moment, there’s a risk that they will miss out if they hit the pause button. From cost savings brought by innovative digital products and services, to improved brand reputation and increased profitability, there are a lot of longer-term benefits they could be failing to unlock. So how can they keep moving forward?
Losing momentum
Emerging technology holds the key to their success, with the power to disrupt current behaviours and promote a more sustainable culture. Banks are already aware of this, with 76 percent using digital transformation to drive sustainability, but a lack of leadership has made it difficult to build momentum in the last 12 months. Currently just over half (54 percent) of banks have tasked an executive at board level with overseeing sustainability – way down from 83% just 12 months ago.
This lack of board authority means banks are struggling to engage the entire organisation to move ahead with sustainable initiatives. As a result, almost two-thirds of banks are seeing progress slow, admitting they are not actively taking steps to foster more sustainable behaviours throughout the organisation. Those that have taken their foot off the gas need to find a way to move forward again.
No time for standing still
Banks know that technology can drive sustainable behaviour. For instance, many of them are already encouraging their workforce to work remotely, as a way of reducing travel. This has two benefits – not only does it cut the costs of running physical offices at full capacity, but also reduces the bank’s carbon footprint. There has never been a better time to invest in technology to drive more sustainable behaviours.
New digital products and services can also extend the benefits beyond employees to encompass the wider customer base. A fair number of banks are already investing to make this happen. More than a third (35 percent) of banking organisations are using Machine Learning (ML), Artificial Intelligence (AI), cloud and analytics to make digital services more easily accessible. Investment in these technologies will be critical as the number of physical bank branches continues to decrease, with figures from Which? showing this is taking place at a rate of 54 branch closures each month.
Hitting environmental and social responsibility goals
Emerging technologies can also help banks keep pace with tightening ESG rules and regulations. Banks are faced with demands for increasingly granular reporting and transparency on ESG – demanding a new approach. In line, 41% of them are developing data visualisation tools to improve stakeholder engagement and understanding of ESG risks and opportunities, while 37% are using machine learning and artificial intelligence to identify and track ESG risks and opportunities across a wide range of data sources.
More than one in three are also using the blockchain to improve transparency and traceability in supply chains, and implementing digital tools and platforms to collect, analyse, and report ESG data and metrics in a standardised and consistent manner. All these applications of emerging technology will put banks on track to address global environmental challenges and unlock a greener future.
Long-term sustainability
As the economic pressures hopefully start to subside, increasing numbers of banks will start investigating how they can use emerging technologies to provide engaging experiences and value-added services for customers, to drive greater revenue and efficiencies.
Whilst banks are right to focus on their revenue under difficult trading conditions, it’s important they don’t miss out on the long-term benefits that sustainability can bring. To capitalise on this, banks must keep pushing the boundaries and invest in emerging innovations to drive more sustainable banking behaviours, benefiting the planet and driving great digital experiences for customers.
Magazine
Trending


How can law firms embrace automation and revolutionise their payments?
Attributed to: Ed Boal, Head of Legal at Shieldpay Once again, AI is dominating international headlines. This time, it’s...


In-platform solutions are only a short-term enhancement, but bespoke AI is the future
By Damien Bennett, Global Director, Principal Consultant, Incubeta If you haven’t heard anyone talking about artificial intelligence (AI) yet,...
Exploring the Transformative Potential and Ethical Challenges of AI in Wealth Management
Nuno Godinho, Group CEO of Industrial Thought Group In recent years, the advent of AI has sparked both excitement...


Are SaaS platforms challenging banks for a piece of the payments pie?
Attributed to: Ralph Dangelmaier, Global CEO of BlueSnap The finance industry is at a tipping point with software firms...


Emerging technology will power long-term sustainability within the UK banking industry
By Peter-Jan Van De Venn, VP Global Digital Banking at Hexaware Mobiquity. Sustainability has been a big focus for...


Is your business suffering with Fintech FOMO?
Tom Kiddle, Chief Commercial Officer at Equals Money It’s a challenging time for businesses of all sizes, but the past three...


The Future of Banking: Streamlined Cash Management for ATMs
Gaetano Ziri, Innovation Manager, Auriga “Maintaining free access to cash for the community demands robust strategies to mitigate the...


Can AI revolutionise wealth management?
~ The benefits of AI when collecting and analysing financial data ~ Global fintech company Finder reported that around...


Where is the value in generative AI for financial services?
Michael Conway, Executive Partner, Data, AI and Technology Transformation Service Line Leader at IBM Consulting The New York Times...


Connecting the security dots with cyber fusion
Anuj Goel, Co-founder and CEO at Cyware Against the backdrop of Russian-based hacktivists declaring war on Europe’s financial systems, the...


Exploring the symbiotic advantages of SoftPoS for merchants and consumers
By: Brad Hyett, CEO at phos by Ingenico Amid the dynamic shifts that have come to define today’s fintech...


Investing In Bitcoin: What You Need To Understand Before You Buy
Bitcoin—the digital currency that launched a financial revolution—is more than a trending investment. This decentralized currency, free from traditional banking...
How the LEI Can Help Financial Institutions ‘Address’ a Growing Challenge in ISO 20022
The vast complexity and inconsistency of address formats globally presents significant challenges for financial institutions. In this blog, GLEIF’s Head...


Building towards an inclusive financial future
By Catharina Eklof, CCO of IDEX Biometrics From the visually impaired to displaced migrants, the unbanked, and people living...


Euro deep tech M&A deal value expected to reach $20bn+ in the next 15 months
Written by Oliver Warren, Associate at DAI Magister Investment in European deep tech has mirrored the broader decline in...


Why ESG Investing Is Becoming More Important
Author: Urtė Karklienė, Sustainability Manager at Oxylabs Environmental, social, and governance (ESG) term was first mentioned in a 2004...


Preparing banks for digital transformation
By Joman Kwong, Strategic Solutions Manager, Financial Services at Laserfiche Today, digital transformation is imperative for every industry. After...


The critical tech to deliver personalised digital financial experiences
Jay Sanderson, Senior Product Marketing Manager, Digital Experience at Progress Providing customers with outstanding digital experiences is now a must...


Bank-fintech partnerships can shape the future of cross-border payments
Steve Naudé, Head of Wise Platform People and businesses are more interconnected than ever. In today’s global economy, international...


DORA Compliance in Financial Organisations: What You Need to Know
Nick Hogg, Director of Security Training, Fortra The regulatory landscape is tightening for European banking, financial, and insurance institutions....

How can law firms embrace automation and revolutionise their payments?

In-platform solutions are only a short-term enhancement, but bespoke AI is the future
Exploring the Transformative Potential and Ethical Challenges of AI in Wealth Management

Are SaaS platforms challenging banks for a piece of the payments pie?

Emerging technology will power long-term sustainability within the UK banking industry

Is your business suffering with Fintech FOMO?

PCI DSS v.4.0 Latest Updates That You Need to Know

RBI’s MASTER DIRECTION ON DIGITAL PAYMENTS SECURITY CONTROLS

EMV® 3-D SECURE: ENABLING STRONG CUSTOMER AUTHENTICATION

HOW TO SIMPLIFY IDENTIFICATION IN THE GLOBAL DIGITAL ECONOMY WITH THE LEI

EXEGER – CHANGING THE PERCEPTION OF POWER

FUTURE FX PROMO
Trending
-
Finance4 days ago
Investing In Bitcoin: What You Need To Understand Before You Buy
-
Finance3 days ago
Where is the value in generative AI for financial services?
-
Business3 days ago
Exploring the symbiotic advantages of SoftPoS for merchants and consumers
-
Technology3 days ago
Connecting the security dots with cyber fusion