Secure payment in e-commerce: best practices

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Secure payment: a strong expectation from internet users.

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Consumers who buy online have many demands: choice, delivery times, customer service… But one of their first concerns is the payment phase. Is it safe enough? Can I enter my card codes risk-free? Dalenys, a fintech specialist in digital payments, a subsidiary of Natixis, offers a secure payment platform, anti-fraud services and advises e-commerce companies to establish clear and reassuring payment pages. A complete arsenal for secure payment.

In fact, 88% of consumers who have already abandoned their basket when paying did so out of doubt about security when arriving at the payment page1. It is not, therefore, just about offering secure online payments, but also about making it known, with a purchase process that is sufficiently reassuring for the consumer to realize that he is in a safe environment.

Strong authentication to ensure payment security

In 2021, a European regulation reinforced the security of online payments, introducing the concept of strong authentication to better protect European citizens in case of bank card theft: it is the Payment Services Directive 2 (PSD2). Authentication is said to be “strong” when it integrates two factors between possession (what the customer has), knowledge (what he knows) and inherence (what he is). This process allows you to verify that it is in fact the bank card holder that is validating your purchase.

Internet users must now, with a few exceptions, authenticate themselves with their bank when paying for their purchases on an e-commerce site. This action is usually done through the consumer’s banking app, by entering a code, or via biometric authentication. These purchase paths are certainly safe, but they are an additional step for consumers. By adding “friction” they also increase the risk of cart abandonment.

Create safe, frictionless purchase journeys

Having your phone handy, tapping, remembering your code… these prerequisites for authentication are all risks of making the process fail. Among consumers who say they have abandoned a shopping cart when paying online, 61% question a very restrictive security level and 81% question a slow process1. For e-merchants, therefore, it is important to be able to continue to offer customers trusted purchase paths without authentication.

Fortunately, exemptions exist, and e-merchants can ask the issuing bank for “friction-free” routes, i.e. without authentication, according to risk analysis criteria per transaction. Furthermore, if fraud rates are controlled at the e-merchant, the trust relationship with the issuer will facilitate the acceptance of strong authentication waiver requests. It is to optimize this management of fraud and exemption requests that Dalenys has designed a personalized support program, adapted to the context of the Payment Services Directive 2, called Fraud Premium. E-merchants who subscribed to this service improved their performance, with an average of +1.6 points in the acceptance rate and -96.5% in the default rate (results obtained in the 1st half of 2021).

In fact, the more exchanges there are between banks, payment service providers (PSP) and the e-merchant, the less strong authentication requests will impact merchant performance. This cooperation is based on the exchange of new data required by 3DS v2 (new version of the security protocol required by PSD2), as well as requests for exemptions.

Reassure online shoppers

Finally, it is not enough to guarantee payment, it is still necessary for the customer to understand and be calm when paying online. There are also good practices to optimize the payment page in this regard. First advice: when arriving at this page, the consumer must remain in the universe of the brand, with the design and colors of the e-commerce site they were browsing. This removes doubts about the fact that they are still dealing with the same site.

In addition, he must find all the necessary information: the summary of the basket, the delivery address, information on how to protect the card data, etc.

You also have to think about the cell phone. The user experience must be adapted to smartphones as the number of mobile payments is constantly increasing. The total amount of mobile payments in France increased by more than 151% in the period from January to April 2021 compared to the same period in 2020, according to the Payments Observatory Natixis2.

Finally, it is recommended that the e-merchant send a communication to their loyal customers to inform them about the new strong authentication obligations, so that they are not surprised by this process if it is triggered at the time of purchase, and that they remember to bring your phone when paying.

1 source: Dalenys/Opinionway Study: E-commerce 2022: French developments and expectations

2 data of anonymous transactions carried out by bank cards issued by Banques Populaires and Caisses d’Epargne.

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