Doug Gray, Chief Commercial Officer at iAxept, says the holy grail of online commerce – improving transaction security while reducing consumer friction – is achievable. By adopting online contactless payments, merchants can improve security, speed up transactions and grow e-commerce sales.
Although companies and regulators have stepped up their efforts to fight online payment fraud, there’s not much sign of progress: as our new White Paper, Online Commerce’s toughest challenges shows, card fraud over the internet continues to rise across Europe and North America – even if it’s shifting between fraud types as criminals adapt to current defences.
Part of the problem lies in today’s attempts to make online payments more secure, as these increase customer friction and make paying online frustrating. For instance, regulators are beefing up their anti-fraud demands with stipulations like the EU’s Strong Customer Authentication (SCA). In response, many retailers are looking to either 3DS or One-Time Passcodes (OTPs) delivered by SMS to secure transactions and meet their regulatory obligations.
However, our White Paper shows that rates of compromise for OTPs via SMS are rising fast; meanwhile, data from Ravelin Technology suggests fewer than 6% of 3DS transactions are frictionless. Even worse from the user’s perspective, Ravelin reports the average time taken to authenticate a 3DS transaction at 41 seconds. That level of friction has led to 30% of transactions being abandoned, and reduced revenue for merchants.
What’s needed is a solution that removes friction and encourages users to shop more. An online solution that’s treated as a card-present transaction – effectively taking away the risks and costs associated with CNP fraud. At iAxept, we have created a revolutionary way to pay online. Our solution taps into the popularity of contactless card payments to deliver SCA-compliant, rapid transactions online – and consumers love it.
With iAxept, there’s no need to input card information, usernames and passwords, or go through complex registrations. One tap of a contactless card on the back of the cardholder’s smartphone and the transaction is complete. The entire process is fast, simple and secure. Furthermore, the transaction is a card-present transaction similar to an unattended terminal, which completely removes both the risk of CNP transactions and associated liabilities.
Based on our experience, and studies conducted by PCM Research, an online clothes retailer and gaming company deploying contactless payments online can expect to increase e-commerce revenues by up to 11%, and net margins by up to 13%. These performance improvements are achieved by reducing cart abandonment rates (more completed transactions), reducing the number of fraudulent transactions thanks to improved security, and a reduction in intra-regional interchange fees – since online contactless transactions are treated as card-present.
Click here to download our white paper and find out more about how iAxept allows retailers to secure transactions and grow business online without adding friction at checkout.www.iaxept.com
EBA Opinion Paper June 2019 – https://eba.europa.eu/eba-publishes-an-opinion-on-the-elements-of-strong-customer-authentication-under-psd2
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