Is Trust Enough for Determining the Security of Payments?

Distrust towards new technologies is one of the biggest barriers in the adoption of modern payment methods. This is hardly a surprise, considering how limited access we have to the information on the security of payments in different applications.

On the B2B side, solution providers can easily prove that they follow agreed upon safety standards with a certificate of a successful security audit. This informs us that the service can be trusted to be truly secure.

The consumer side lacks this sort of well-known evidence, which leads to a situation where customers are forced to make decisions based on guesswork alone.

False Image of Security Creates a Risk Factor

Due to the difficulty of verifying the security of payments, consumers’ trust plays a pivotal role in tech adoption. The problems come from the fact that this trust stems from peoples’ subjective view of companies or technologies, rather than actual knowledge of a service's security.

As trust is strongly associated with product’s image, there is a risk that consumers will shun a more secure payment method based on wrongful information.

As an example, take a fun and simple payment solution with lackluster security measures that takes advantage of a market opportunity created by false rumors. In this case, there is a very real chance that consumers end up placing their trust on this provably vulnerable method. All the while, truly secure systems are rejected due to mistaken assumptions.

A similar situation might be approaching between card based contactless payments, and novel mobile payment methods. As NFC based card payments have long been followed by a baseless stigma, claiming it is easy to charge contactless cards even from consumers’ pockets.

When we take into consideration factors such as the merchant agreement required to transfer money, security mechanisms inherent in the card, along with the extremely low range of the NFC technology. The act of “skimming” contactless cards becomes a lot less feasible.

This however has not hindered the fearmongering surrounding contactless payments. We have arrived in a situation, where a trust shift towards more risk prone payment methods poses a greater threat than crime surrounding card theft.

Technological Development Brings New Threats

The developing technology opens new avenues of attack for payment crime. The security situation becomes even more absurd, when various Internet of Things devices become commonplace. Can consumers truly trust a refrigerator to make purchases for them?

Even today, people bring home appliances, which prove faulty in use or are of questionable quality. What happens when you give a discount store washer a payment feature and license to fork out money? Is the good repute of an appliance manufacturer reasonable evidence of the security of payments?

In the coming years, most of the electronic payments are made from places other than the neighborhood kiosk. The problem is that moving the payments to freezers and vacuum cleaners increases the attack surface, weakening consumers’ data security.

That said, getting acquainted with the intricacies of different technologies is a lot to ask from your average consumer. You don’t need to be especially lazy to not know what kind of security measures are present in your mobile applications, let alone any of the upcoming IoT devices.

As such, it would be beneficial if the industry could agree on an easy way to reliably communicate to the customer about the security of their software and devices.

The Overemphasized Role of Trust in Payment Security

Trust is likely to remain an important factor in consumers’ choice of payment methods. The silver lining is that as a trust society, Finland is quite competitive in this area. Finnish customer can assume that common agreements are honored and issues rectified.

A proven method of generating trust could be a solution similar to the warranty previously used in credit cards.

Earlier when paying with credit card, customers were responsible for practically nothing. Losses caused by fraud, theft, skimming etc. were all compensated by banks or credit card companies. This model was later abandoned, after credit card usage became widespread. Nevertheless, guarantee remains an excellent way to garner goodwill towards new payment methods.

How to Communicate About the Security of Payments?

The development of payments begs the question: How can we affirm a customer of a certain technology’s safety?

Would it be possible to promote a new brand or label that confirms the security of payments? Alternatively, could an existing security standard be marketed towards consumers?

Another approach to strengthen payment security would be to increase the payment regulation. Unfortunately, this can have a negative side-effect of decreasing usability and deteriorating user experience. When we take into consideration how tedious online payments are as is, and the related conversion problems, it is clear that there is limited leeway in this direction.

Our wish is that in the future, a customer won’t need to make decisions on data safety based on rumors. Instead, everyone should have an easy access to factual info on the security measures present in various payment methods.