News & Views - Savantor

Security and convenience

Tuesday, 16 July 2019

A recent study, conducted by the online payments processor GoCardless, across the UK, France, Germany and Spain, revealed that almost half (43%) of UK consumers felt that “speed and ease of payment” was the most important factor when paying for something online. This compared to less than a fifth in Spain (17%) and a third in France (32%) and Germany (33%).

Yet shoppers in all markets in the study considered that a secure checkout process is important, with French shoppers indicating the greatest preference for security (62%), followed closely by German (61%), Spanish (58%) and UK (55%).

It does not seem unreasonable that the dual primary requirements of shopping online are both ease of use and secure dealings online.

Under PSD2, it has been mandated that Strong Customer Authentication (SCA) should come into force across Europe from 19 September 2019.  SCA is a two-stage verification process which means customers will have to take extra validation steps to pay online with a card. 

This will have significant implications, particularly for online retailers who will need to be fully prepared for the changes to ensure legal compliance. The British Retail Consortium (BRC) estimates that 75% of small businesses are not aware of the requirement for SCA or the 14th September deadline.

Additionally retailers will also need to consider how to mitigate the possibility of more consumers abandoning their basket at checkout when being faced with additional steps in the payment process. The Gocardless survey indicates that 44% of UK shoppers had abandoned an online order because of complex or lengthy security. This figure is likely to increase with the additional security requirements, let alone any increase in website loading times experienced by consumers due to service providers not being ready to fully support the new standards.

Last month the European Banking Authority (EBA) conceded that some firms, on an "exceptional basis", could get an extension of the September deadline for the new SCA. The UK's Financial Conduct Authority has correspondingly confirmed a delay to the enforcement of the stronger payment security standards to give firms more time to prepare.

Whilst it is essential that online payments are as secure as is possible, nevertheless the ease and convenience side of the transaction process must not be forgotten. This is not merely to avoid inconveniencing consumers, but to mitigate the inevitable consequences that this will have upon the retail sector, small businesses in particular, of abandoned sales. It is in the interests of all parties to achieve as smooth a transition to the new authentication standards as possible.

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