Security becomes a top priority as payment technologies proliferate
Credit and debit cards now have EMV chip technology, the global standard for card payments that significantly reduce fraud. Many card users are familiar with this technology, but do we really know how it works?
According to a report released on August 12 and made by Forrester Research, more than three-quarters of companies are investing in new payment technologies, the report “Understanding the Evolving Payments Landscape” says that retail merchants and online businesses expect the way that consumers pay for goods to change relatively quickly with about half expecting to face increasing choices in payment offerings. At the same time, 61% of financial institutions and merchants believe that fraud will also increase.
This divided position on the financial future is not surprising because many consumers are quick to adopt the latest technology, while companies often distrust new technologies until they prove themselves, says R.L. Prasad, senior vice president of payment system risk at Visa, which commissioned the Forrester report.
"Consumers are becoming more and more comfortable with carrying money on their phone, so mobile wallet expansion is an area that will see a lot of growth," he says. "Peer-to-peer payments are also here to stay. The convenience is unparalleled right now."
Merchants and credit card issuers continue to suffer big breaches, Visa and other payment technology companies are looking to improving analytics and deploy machine learning that can detect and prevent fraud.
The continued concerns of merchants and business comes as they adopt more payment technologies, according to the Forrester report fifty-eight percent of those surveyed support digital wallets, and 60% support peer-to-peer payments. Almost three quarters of respondents support paying bills through mobile banking.
"Consumers' usage of new payment technologies is expected to increase substantially over the next five years," according to the report. "Banks, merchants, and fintechs are working hard to ensure they offer these capabilities to their customers."
Most companies are hiring staff specifically tasked with security and anti-fraud roles, while more than three-quarters are spending on new tools to help secure transactions.
The best approach to combating fraud is to improve security, investing in people, products, and collaboration with service providers, Prasad says. About two-thirds of companies with mature security processes say that partners are critical to the effort, the report states.