There are lots of factors that separate a successful payment method from an unsuccessful one. Ease of use, the right industry support, the buzz of social media, all play their part, but none are as important as trust.
Money itself is predicated on trust, it’s a promise. Take the common banknote, for example. It has no intrinsic value in itself; it is a form of negotiable instrument known as a promissory note whereby the bank will pay the value of the note if so demanded. Even the value of money itself is entirely abstract, it’s what you can do with the value that’s important, and everyone has to agree to participate in the same way for it to work.
We use banknotes, cheques, and payment cards and so on because we trust them; we trust that the issuing bank will make good on their promise and that the payment medium will be accepted by whomever it is presented to.
This issue of trust becomes far more difficult to address in the purely digital world and can make or break a payment method. For example, it is something for which NFC suffered unfairly, especially in light of Apple’s delay in including the technology in their iPhones.
On the tenth anniversary of its launch, YouGov carried out a wide ranging survey into public attitudes towards contactless payments. 56% of those surveyed did not believe the technology was safe to use. In addition, A Gallup poll conducted on July 8th this year determined that only 13% of the 17,000 consumers surveyed had an e-wallet on their phone, with the majority citing security reasons (55%).
Now, as an integral part of Apple Pay, and the Card Scheme’s tokenisation efforts readily available, NFC is finally getting the public vote of confidence it deserves. But it should be remembered, that Apple Pay and tokenisation offer additional security factors that a contactless solution alone cannot provide.
New payment methods on the market are increasingly diverse, especially when we are looking at wearable tech. But it’s not enough just to be novel, any method of payment or authentication has to be trustworthy. And that trust has to come from the perception of security, and must be backed up with a shift in liability for loss, from the consumer to the payment provider.
No matter what payment method is being used, consumers need to feel safe using it. If a consumer has a ten pound note and loses it, they’ve only lost ten pounds. If a customer loses a payment card, they can have it cancelled immediately and any fraudulent transactions are refunded.
With new payment methods, consumers will have concerns about what could happen if security is breached. They will be worried about identity fraud and the effect it could have on their personal finances and credit rating.
New and emerging payment and authentication methods have to have security at the heart of the offering, no matter what the architecture of the solution. It is not enough just to be secure either, they have to feel secure to overcome the consumer’s natural reticence to try new payment methods. Getting that blend of security and familiarity right is critical to getting public trust. And trust is critical to success.