Frictionless payments: The new paradigm of the eCommerce economy

The British Retail Consortium Annual Payments Survey out today reveals a higher than expected increase in non-cash payments, with retail purchases made by cards online accounting for more than 80 per cent of all retail sales. Global growth of eCommerce has contributed to the surge in the number of online shoppers, which stands at 1.3 billion people, or one quarter of the world’s population[1].

The growth in eCommerce increases the risk of online fraud. Unauthorised financial fraud losses across payment cards and remote banking totalled £844.8 million in 2018, an increase of 16 percent compared to 2017[2]. The Office for National Statistics (ONS) estimates that around 4.5 million cybercrimes were committed in England and Wales in 2018. Of those, around 3.24 million were fraud offences[3]. Only around 20 percent of fraud is actually reported to police, with the emotional impact of the crime leaving many victims reluctant to come forward.

While technology is taking speed and convenience to new heights, it is also leading to increased instances of cybercrime. Payment service providers, online merchants and regulators face the challenge of protecting businesses and customers from fraud, without creating friction during onboarding that may lead to cart abandonment, according to Zac Cohen, general manager at Trulioo.

Zac continues: “By investing in advanced technology that verifies user identities and checks against fraud data before allowing them to transact, merchants and customers are actively protected from significant fraudulent losses. Fraudsters remain on the lookout for gaps in the armour, and emerging online retailers are often the perfect target because they’re focused more on speed and user experience and less on security, making them vulnerable”.

Zac concludes: “In today’s highly competitive environment, first impressions count for everything. Identity verification has a significant impact on customer experience, which is why the verification process should be quick and seamless. As consumers shift away from brick and mortar shops, every step of the online customer journey and the corresponding identity verification requirements has the potential for improvement with the use of automation”.