How intelligent security will drive eCommerce growth

The COVID-19 pandemic has prompted an unprecedented surge in eCommerce transactions, with more consumers choosing to shop online especially as their favorite retailers have had to temporarily close their physical stores. In addition, people prefer staying at home and avoid contact with potential contagions outside. Along with this, the government sent a plea to the people of Kenya on the onset of the pandemic, urging them to avoid the use of cash as one way to curb the spread of the virus. Brick-and-mortar retailers are likely to follow latest trends by bolstering their online presence or even venturing into the eCommerce realm for the first time.

While the current circumstances have radically reimagined consumers’ shopping patterns and prompted merchants to go online quickly, consumer expectations have remained the same. They want a secure and seamless payment experience, especially now, when the world is on a lockdown, and scams are on the rise. This is why I want to share some perspectives on how merchants can realize eCommerce’s full potential and deploy intelligent security to build trust and drive business growth.

Shopping cart abandonment: the major challenge for online retailers

A common mistake among new online merchants, for example, is to overcompensate for their fear of fraud by implementing security solutions that are so rigid that they prevent legitimate consumers from shopping and checking out with ease. Consumers hold an average of 23 password protected online accounts, and one-third of them admit that they “very frequently” or “frequently” fail to complete online transactions due to password-related memory lapses. About 24 percent of customers abandon the online purchasing process (what we call “abandoning the cart”) because they find it too complicated.

Even when consumers manage to make it to checkout, their transactions may still not go through. In fact, 1 in 15 customers who are declined due to suspected fraud are actually legitimate with 58 per cent either reducing or ceasing doing business with the merchant in question. Consumers whose transactions are declined may decide not to make their intended purchase at all, either because they do not have an alternative form of payment or because they are unwilling to go through the process again. When customers are rejected for reasons they don’t understand, they are likely get frustrated not only with the failed transaction, but with the merchant itself, and even eCommerce in general, thus reducing the potential of future sales as well.

The solution: smarter digital identification

Fortunately, technology has advanced to the point where there no longer has to be a trade-off between strong online security and a great customer experience. Payments platforms, such as Visa, are taking a leadership role with such industry standards bodies as the FIDO (Fast Identity Online) Alliance, whose mission is to deliver authentication standards to help reduce the world’s over-reliance on passwords, and EMVCo. (a six-member organization— consisting of American Express, Discover, JCB, Mastercard, UnionPay, and Visa) which facilitates worldwide interoperability and acceptance of secure payment transactions.

For example, Visa Secure, Visa’s new program governing online transactions, uses the EMV 3-D Secure industry-wide messaging standard that merchants and issuing banks must follow to verify cardholder identity before a transaction is sent for authorization. EMV 3-D Secure is the next-generation version of 3DS 1.0 – developed by Visa, which has been the market’s online security protocol for almost 20 years.

Visa Secure, Visa’s new program governing online transactions uses the EMV 3-D Secure industry-wide messaging standard that merchants and issuing banks must follow to verify cardholder identity before a transaction is sent for authorization. EMV 3-D Secure is the next-generation version of 3DS 1.0, which Visa developed and owned, and which has been the market’s online security protocol for almost 20 years.

Visa Secure delivers greater fraud prevention by sharing up to ten times more data with issuers for better risk analysis and advanced decision-making. This eventually helps both merchants and issuers detect and avoid fraud more effectively, while consumers can benefit from a smoother and more consistent user experience across multiple payment channels, including mobile web, in-app and digital wallet payments, without any comprise in security.

This risk-based authentication process also eliminates the need for the vast majority of cardholders to type in passwords to complete their online purchases, translating into fewer checkout steps (less friction) and fewer instances of false declines.

While the proliferation of connected devices has made it easier for consumers to purchase goods and services online, it has also introduced new challenges for combatting online fraud and providing frictionless checkout experiences. By allowing merchants and issuers to avoid and detect fraud more effectively, while enabling consumers to make secure, simple transactions with less friction across multiple payment channels, Visa’s new 3DS technology aims to resolve what has long been a dilemma for eCommerce players, at a time when more consumers will be using these platforms. 

The writer is Irene Auma, the Director – Risk Management, East Africa at Visa.