The ability to browse limitless shops and purchase goods and services from almost anywhere in the world has revolutionised commerce. Yet this revolution is unfinished because no matter what the choice, no matter what the shopping experience, the critical moment of entering personal and payment details can be so complex as to lead to the customer abandoning the sale.
The most frustrating element of this is that there is no reason why this should be the case. There is no lack of technology preventing a smooth and secure authentication and payment process. What we have is a failure to address the collective needs of the payment stakeholders: consumers, retailers and banks. Each of these groups have both individual and collective needs. Yet the individual needs are not mutually exclusive and the collective needs are achievable.
So, why are there still gaps between what stakeholders want and what stakeholders actually get?
Consumers want a consistent standard, as they get in a face to face transaction. Something that they can trust and easily use. If a payment method doesn’t appear trustworthy, is not consistent or is too complex, it won’t be widely adopted.
Retailers want something that is both future-proofed and easy to slot into existing payment systems.
Banks want security and compliance and something that can work with their existing infrastructure.
We recently issued a white paper, Digital Payments – Bridging the gap between security and convenience, where we looked in detail at the limitations of the current payments ecosystem. In this, we estimated that consumer concerns over payment security – either too much or too little – would cost the global economy $1.4tn in abandoned sales in 2015. In part, this is down to authentication systems that are not fit for purpose.
Being able to securely, consistently and conveniently authenticate the customer should be a priority. Yet we would argue that it currently is not.
We are working in a new industry of digital payments and authentication. This brings new innovation. However, it is evident that while we know where the gaps are, they not being filled. In fact the problem can even be compounded because of the danger of innovation for the sake of innovation. New devices and solutions are launched almost daily with many of them seeming little more than just gimmicks. Pay with your watch, pay with a bracelet, pay with your glasses. The industry is focused on revolution. We say it should be focused on an effective evolution instead.
We know that consumers want ways they can swiftly and securely identify themselves, making a digital transaction as straightforward as at a check out or bank counter. We know that merchants want something that can fit into exiting systems with minimum fuss. And we know that throughout the payments ecosystem, from retail to banking, security has to be assured.
At myPINpad, we developed a system where consumers can pay for goods in e-commerce and m-commerce transactions using their existing card issued PIN. We did this because it makes existing payment methods available to use in the digital commerce channels. A straightforward solution to a problem evolving what we currently use successfully extended to work effectively and securely in the digital age.
We don’t suggest that our solution is the only ̶option for improving digital transactions. Indeed we recognise and actively support new appropriate authentication techniques and foresee a blended multi factor approach. But we would suggest that using PINs, which are proven, tried and tested authentication asset, to bridge the gap in digital is a much needed step and addresses what needs to be done to make authentication and payment in the digital channel consistent, familiar and as simple as it is in face to face channel.
The author is David Poole, director at myPINpad
