The digital payment system has evolved over the last decade, and a new survey reveals that consumers generally feel secure in the use of PIN for online authentication.
The Mobile PIN Authentication Survey, developed by myPINpad, asked respondents about attitudes combining cardholder PIN with mobile authentication for payment, and the results found that 69 per cent of respondents feel secure with the combination of chip and PIN for in-store shopping. Another 90 per cent of frequent online shoppers stated that they would use PIN to authorize payment through their mobile devices.
myPINPad, an organization that works to enable a secure authentication process through the use of PIN, is part of the Fast IDentity Online (FIDO) Alliance, an initiative that is looking to change the nature of online authentication. Formed in 2012, the Alliance was developed to address user issues in creating and remembering multiple usernames and passwords, and the interoperability among authentication devices.
When it comes to online safety and user experience, there were few surprises with the survey results.
“There’s a lot of talk with retailers around a frictionless experience,” said myPINpad business development director David Poole. “The consumer wants to know that they successfully paid, and they want to know that you are protecting them.”
Recent stats show a growing need for secure mobile payment, with an increasing number of consumers choosing to do their shopping via mobile. According to Barclays, 18.3 million consumers in the U.K., the home base of myPINpad, are estimated to shop regularly on a mobile device. The study found that U.K. consumers, who currently spend $14.4 billion on mobile retail transactions, are predicted to spend almost $79.6 billion by 2024.
“A lot more people are shopping on the mobile and a lot of merchants are investing in that customer journey via mobile to make it richer,” added Mr. Poole.
When it comes to ease of use, Mr. Poole points out that when compared to 3D Secure, the authentication process led by major credit cards, a PIN is not cumbersome and is almost always committed to memory. In comparison to fingerprint authentication, the advantage of PIN is that it is validated at the issuer at the time of purchase.
Of those surveyed, 85 percent of people also noted that they’d like to be notified on their mobile of any high-value transaction and have the ability to authorize with their PIN.
While PIN authentication shows clear advantages to the consumer, merchants have a distinct opportunity for charge back protection when a PIN is used and avoid merchant costs often associated with fraud such as product loss, administrative costs, fines, and charge back.
Overall, myPINpad sees great opportunity for the banking sector to become top of mind and top of wallet in the new year.
“I think the biggest thing for banks is that they are being disintermediated, and will have to respond in 2016,” added Mr. Poole, applauding Apple and their ability to seamlessly transition into the payment space with Apple Pay. “Within mobile channels, the banks need to get back to top of wallet. A PIN is a great asset for banks to effectively become top of phone, every time a customer makes a transaction.”