The need to provide a seamless and secure online checkout experience is increasingly important as consumers shift more of their daily activities to digital channels.
The 2016 American Express Digital Payments Security Survey found that nearly half of consumers who shopped online in the past year have experienced payment fraud, representing nearly 80 million online consumers.
Ease Concerns About Digital Safety
As consumers make more purchases through digital channels, they're also paying close attention to security. According to the survey, 42 percent of online shoppers have abandoned an online purchase due to payment security concerns. Consumers are more aware of possible security risks as their use of mobile and online channels increases.
The need for enhanced security within digital channels will continue to grow, which will require merchants to continue prioritizing their investments in security and fraud prevention. The good news is that investments in security can help merchants gain consumer trust, which can also lead to increased sales.
Merchants are already taking steps to increase online security; on average, merchants are investing 28 percent of their IT budgets on data security, according to our survey.
Consumers who participated in our survey cited several steps they're willing to take to help protect their information:
- Require security codes. Seventy-eight percent of consumers say they're willing to enter a security code (CVV) for transactions, yet only 57 percent of merchants require shoppers to provide this.
- Include security questions. While 70 percent of online consumers say they would be willing to answer security questions, only 43 percent of merchants make such questions available.
- Require one-time passwords. A separate one-time password can add another layer of online security, and 68 percent of online consumers are willing to use one, but only 37 percent of merchants require such passwords.
Consumers Can Also Help Protect Their Information
Retailers can enable consumers to protect their own information. Less than half of shoppers (44 percent) use a different password for every online account; 30 percent change their passwords once or twice a year; and 17 percent never change their passwords, according to our survey. We encourage consumers to create different passwords across all accounts and update them every six months to 12 months.
For merchants looking for additional ways to fight fraud and improve their online experience, the following steps can help build consumer trust:
- Make security cues visible. Seventy-eight percent of online consumers say they want visible security cues, but only 52 percent of merchants report using data encryption on their sites.
- Provide easy access to contact information. Shoppers say they want easy-to-find customer service contact information on websites.
- Consider tokenization and 3-D Secure. Replacing actual credit card account numbers with nonsensitive token equivalents that map back to the sensitive data can help to keep fraud in check. 3-D Secure is a global industry standard that detects and reduces online fraud by validating the card member’s identity through various methods, including risk-based authentication and dynamic, one-time passcodes.
Merchants that focus on enhancing their online security and creating a seamless checkout experience for consumers will set themselves up for success in 2017. Taking these essential measures will lead to customer loyalty and more digital sales.
Mike Matan is vice president of industry engagement, product and marketing for American Express’ Global Network Business.