Alternative payments require strong authentication

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Socure - Alternative Payments - March 2022 - Learn how FIs and Fintechs are using strong identity authentication to meet emerging cybersecurity challenges

Consumer banking and payment preferences have quickly gone digital, with mobile apps and e-commerce channels rapidly replacing branches or retail stores for many customers.Socure - Alternative Payments - March 2022 - Learn how FIs and Fintechs are using strong identity authentication to meet emerging cybersecurity challenges

These new preferences for online solutions also mean that more and more consumers are willing to experiment with emerging alternative payment solutions such as buy now, pay later (BNPL) methods, cryptocurrencies and mobile wallets. For example, a September 2021 study found that 31% of consumers had increased their use of FinTech apps since the start of the pandemic. However, the growing use of alternative payment tools has also led to a corresponding rise in fraud, with another report 80% of global cybersecurity leaders now consider attacks such as ransomware a major threat to public safety. Account takeover (ATO) attempts, phishing and related scams are also increasingly prolific on BNPL apps, moreover, with fraudsters also targeting larger scale cryptocurrency platforms .

In the last Alternative Payments® TrackingPYMNTS analyzes growing concerns about the security and data privacy of alternative payment methods, as well as how implementing robust and innovative identity authentication measures can help payment providers and merchants protect these methods.

Developments from around the world of alternative payments

Socure - Alternative Payments - March 2022 - Learn how FIs and Fintechs are using strong identity authentication to meet emerging cybersecurity challengesInstallment payment providers are reporting rapid growth and adoption in the use of their solutions, with BNPL provider Klarna recently announcing a 141% increase in US sales between the Black Friday and Cyber ​​Monday retail period of 2020 and 2021. However, BNPL-focused fraud also increased slightly, with an increase 66% of fraud targeted by the BNPL between 2020 and 2021. This includes account takeover (ATO) attacks by bad actors, who use previously stolen credentials to impersonate legitimate users installment payment. services. Guarding against such attacks and other forms of credential stuffing should therefore be a priority for merchants.

However, consumers are placing increasing trust in mobile payment or FinTech apps even as fraud concerns rise, especially when it comes to trusting these apps for their online security. A recent study found that 73% of consumers surveyed believed their data was private and secure on these apps, for example – although, notably, many consumers also lack clarity about what information FinTech apps can share. Only 24% of individuals knew that FinTech applications could share their private data with third-party entities, for example. Closing this consumer awareness gap could be key to retaining the trust of these customers.

To learn more about these and other stories, visit Tracker news and trends.

CASETiFY: Why Identity Verification and Fraud Protection Are Critical to Alternative Payments Growth

Socure - Alternative Payments - March 2022 - Learn how FIs and Fintechs are using strong identity authentication to meet emerging cybersecurity challengesThe global health crisis has prompted a growing number of consumers to try new alternative payment methods, including mobile wallets or cost-effective installment payment tools. Support for such solutions also provides merchants themselves with a key opportunity to increase consumer engagement, Mike Jia, chief growth officer of the e-commerce platform CASETIFY, explained in a recent PYMNTS interview. As fraudsters follow consumers’ lead, however, supporting these payment methods also requires merchants to be able to easily and quickly differentiate bad actors from legitimate consumers.

To learn more about why robust identity verification is essential for retailers to support alternative payments and for the use of these solutions to continue to grow, check out the Tracker story.

How Strong Identity Authentication Can Help FinTechs Meet Growing Cybersecurity Challenges

BNPL payment solutions have quickly become one of the most popular alternative forms of payment, with only mobile wallet provider PayPal reports a 400% year-over-year jump in the use of its own BNPL tool between Black Friday and Cyber ​​Monday sales 2020 and 2021. However, this also led to a corresponding increase in fraud targeted by BNPL. It is therefore imperative for merchants wishing to support BNPL and other alternative means of payment to be able to easily distinguish legitimate consumers from fraudsters.

To learn more about security weaknesses affecting alternative payments and how strong identity authentication can help, visit Tracker’s PYMNTS Intelligence.

About Tracking

the Alternative Payments Tracker®, made in collaboration with Socureis your go-to monthly resource for updates on trends and changes in alternative payment methods.

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