New research from GoCardless has suggested extended authentication processes is costing online retailers sales as a notable chunk of consumers favour convenience over security.
Security is an on-going issue in the technology industry and while it should have been addressed years ago, it wasn’t. What we are now seeing it a desperate attempt to catch-up and put in place the technologies, processes and regulations to create what would be deemed an acceptable level of security. The result is a tsunami of changes which are causing complications all over the place.
One such example is the introduction of Strong Customer Authentication (SCA), a European-wide initiative to set in place two-stage verification for authentication of online purchases. The rules are slated for September and will likely see some notable changes in the way retailers engage customers.
Worryingly for the retailers, the GoCardless research suggests consumers are already frustrated with the authentication process as is. Any further changes could see heightened churn on sales.
According to the research, 43% of UK respondents to the survey said ‘speed and ease of payment’ was the most important factor when purchasing products online. The numbers are certainly smaller in other European nations, but very notable. Security is a consideration in all the markets in question, as you can see in the table below, though it seems there is only a certain amount consumers will stomach before looking elsewhere.
|Speed is the most important factor||43%||32%||33%||17%|
|Security is a large consideration||55%||62%||61%||58%|
|Abandoned purchase because of security process||44%||33%||48%||40%|
As you can see from the final row, a notable number of customers can become easily frustrated by extended security, validation and authentication processes. This might be down to the idea that too much is being thrown at the consumer at once.
Generally, consumers seem to favour being eased into a change. Take Facebook for example, what the platform is today is remarkably different from when it started, and this includes the amount of personal information which is being requested and processed. If all of these changes were introduced at once, there would have been uproar, but like the boiling frog, consumers were eased into the current situation.
For years, the technology industry ignored the importance of security, refusing to make it a priority voluntarily. Now governments and regulators are stepping in to force through changes; it might give the consumer a shock and a negative experience.
“In the eyes of UK consumers, convenience is virtually neck and neck with security in terms of importance when shopping online,” said Duncan Barrigan, VP Product at GoCardless. “Protecting shoppers from fraud when they pay online is crucial, and new regulation which achieves this should be welcomed.
“The flipside is that these measures, if implemented badly, could significantly disrupt consumers and lead to a significant conversion drop off for businesses. Online retailers must work with their payment providers to find the right balance between security and convenience at checkout – not waking up to this new reality could seriously harm e-commerce. Major retailers like Amazon are already sounding the alarm.”