Emerging technologies that will change how we pay and fight CNP fraud
The UK has always been an early adopter of new payment technologies, such as EMV chip cards and contactless cards, often using them long before other countries. Barclaycard recently marked the 10th anniversary of introducing contactless payments to the UK. The landmark moment in September 2007 has since transformed how Brits shop, travel, and trade, making buying and selling quicker and easier for consumers and retailers.
Our status as a payments trendsetter is going to continue in 2018 and beyond, as next generation payment technologies become more widespread. With the New Year just weeks away, everyone’s predicting what trends will be emerging next year. But why stop there? From how we’ll be making payments to how we’ll be fighting CNP fraud, here’s a look at a few emerging payment systems set for disruption in the near future.
A mobile wallet allows you to store payment card information in digital form through an app. Instead of using the physical payment card when making purchases, you use the mobile wallet app. Samsung Pay, Apple Pay, and Google’s Android Pay are just some of the products that will vie to become our go-to digital wallet in coming years.
As mobile innovation expands, wearable technology will integrate technology even deeper into everyday life, with more than 240 million units of wearables expected to be shipped worldwide in 2021. The global value of mobile and wearable contactless payments are expected to reach £71 billion annually by 2018. Increasing processing power, smaller devices, and better availability of high-speed internet are enabling payments to be integrated with wearables. As wearables get more advanced, you no longer have to carry your smartphone around to make payments. The technology can be integrated with clothes, jewelry, fitness trackers, and any other wearable you can think of.
To address the problem of fraud, emerging payments technologies that incorporate biometrics are some of the most talked about, and, according to a Visa study, consumers are ready for them. Biometric payments technology relies on unique physical characteristics to identify an individual attempting to make a payment and determine whether that individual is actually authorised to do so. Techniques that are being used include facial and iris recognition, fingerprints and voice verification. Being able to pay with your fingerprint, iris, or even your veins are other technologies expected to make further inroads soon.
Voice recognition technology is set to change the way consumers buy goods and services. A new generation of products promises to be more efficient. Tech giants such as Amazon, Google, and Apple have been making big investments in voice recognition platforms that may have applications in payments, prompting merchants to investigate how voice might play a part in their e-commerce operations. Voice commands are also expected to disrupt in-store payments. A new feature being tested by Google allows consumers to walk up to a point of sale (POS) and say, “I’ll pay with Google”.
The evolving world of payment technologies promises that payments will be faster, easier, and more convenient. As consumers gravitate more and more towards new payment systems, merchants can no longer consider payments to be purely transactional, but rather as a means to create a more seamless customer experience and help streamline their operations.
Removing friction helps businesses in many ways, but there’s also the issue of security. The faster payments move, the more opportunities they create for fraudsters to crack the system. According to Payments UK statistics, total “faster payments” were up 14% in December 2016. Compounded by the fact that fraudulent CNP transactions are expected to rise over the next five years, retailers stand to lose £53 billion globally by 2022. In the UK already, 70% of the country’s £618 million fraud loss in 2016 was due to CNP fraud.
It’s possible to reduce risk while moving payments more quickly, but it’s no easy task. Retailers need to anticipate an increase of CNP fraud over time and be prepared. The value of using a robust approach to fraud prevention, especially when it comes to authenticating consumers to validate transactions, cannot be understated. By looking at all the points of the customer journey and investing in the right technologies, businesses can better protect themselves from fraudulent transactions and chargebacks.
Having the right solution in place can help businesses prevent both financial and reputational losses. Even with the pressures merchants face, many are optimistic about new payment technologies as a means of improving customer engagement.