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Payment: How to balance the Yin and Yang of security and customer experience

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12th Nov 2015
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With rarely a week going by without news of another online fraud or data breach, businesses could be forgiven for wanting to put in place every security measure available. And yet we live in an era where convenience is king, and consumers show little patience for extra clicks in the checkout. As a result, creating balance between the conflicting priorities of consumer experience and security is fast becoming the essential skill of digital payments. I’ve come to see these as the Yin and Yang of payments, but merchants must find the right path to enlightened balance.

The pace at which payments is moving into the digital world certainly creates a new universe of challenges. In 2014, 74% of all adults bought goods or services online, up from 53% in 2008. In addition,UK online shoppers are also expected to spend an average of £1,174 each in 2015, up from £1,071 in 2014.  

In this instance, the Yin represents the need to consider the covert, shadowy side of this trend. According to the Office of Cyber Security, cybercrime has cost £55 billion in the UK annually. This doesn’t even take into consideration the amount of attacks that are not reported. The City of London Police revealed that 80% of cybercrime goes unreported. The fact is, Payment card data remains one of the easiest types of data to convert to cash, and is therefore a particular target.  

Tackling the Yin of payments requires businesses to make security protocols, like Payment Card Industry (PCI) Data Security Standard, a central part of what they do. Many merchants still see PCI as an overhead, with only 29% keeping it up after an inspection. In some ways this isn’t surprising, as the requirements of PCI get more challenging every year, requiring a level of focus and expertise many businesses feel they cannot afford. But this needn’t be a barrier, with new products and services offering ways to pass much of the burden of managing confidential data to a specialist third-party.

The Yin also requires a business to collect sufficient data on a consumer to manage the risk of fraud.  This is no longer a simple binary decision as a whole new generation of fraud management products now offer access to a vast array of data for decision making and new forms of fuzzy logic make those decisions more complex than ever. Most importantly, when and how that data is collected can now be balanced with the Yang of taking payments: the consumer experience.

The Yang in Chinese philosophy represents the sunny, open side, which in payments is the chance to positively engage with consumers. But in fact, only 40% of UK consumers found it easy to complete a purchase using a mobile device. We know that consumers appreciate a great experience - completions and repeat purchases depend strongly on it. Consumers want to glide through their payment experience, and are quick to spot when this isn’t the case.

For this reason it’s critical that the payment itself isn’t simply tacked onto the buying experience, but is an integral part of it. That means ensuring a seamless transition from one’s basket to payment, using data smartly to reduce unnecessary steps (such as those for security), and increasingly optimise the payments process for a mobile device and other appropriate channels. Once again, businesses can look to a host of third-party solutions to manage the Yang of payments, and no longer need to build and integrate everything themselves.

So what does mastery of the balance between Yin and Yang look like? We see five steps to true enlightenment in payments:

  • PCI is your friend, not your enemy – These security requirements help ensure that your business and your consumers are safe. If meeting the standard is too costly or difficult, look to use third party products and services that intercept consumer data and reduce or remove the burden on your business.
  • Recognise difference - The more you know about a consumer, the more tailored you can make the experience. Requests for security information should never be a one-size-fits all approach, and should depend on who the consumer is and their history with you.
  • Decide wisely - With more data available, deciding if a transaction is fraudulent or just unusual can now be more sophisticated. The latest software enables patterns to be identified and intelligence to be applied to ensure that orders are genuine, reducing the risk of fraud and chargebacks.
  • Be as one in payments - Ensure the payments experience is truly integrated into the buying experience, and not an afterthought. If it looks and feels different to your brand, your customers will notice. The new generation of hosted applications enables payment pages to look like yours, even when they aren’t.
  • Flow with the channel - With increasing proportions of consumers using mobiles and tablets for some - or all - of their buying journey, it is critical that the payments experience suit the specific channel. Aspects like dynamic sizing, card storage and dealing with signal interruptions are now a must.

Balancing the Yin and Yang of security and customer experience not only helps in the short-term by increasing sales, it also helps businesses in the long-term to build their brand and protect reputation. After all, it puts both the customers’ and merchants’ minds at ease when their information is secure. So there shouldn’t have to be a compromise between security and experience. The true masters of payments will be those who can balance them both.

Dan Salmons is managing director of PayPoint Mobile and Online.

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