How intelligent security will drive eCommerce growth

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The COVID-19 pandemic has prompted an unprecedented surge in eCommerce transactions, with more and more consumers choosing to shop online especially as their favorite retailers have had to temporarily close their physical stores. We observed a significant increase in e-commerce. Today, the importance of online presence has increased for both business and consumers. Merchants and consumers are looking into making everything online, remotely and contactless where possible. Even those who have had offline payment experience only – both on business and consumer side are now looking into options how to do their business online and handle their daily routine remotely. And this trend is likely to continue in the future.

While the current circumstances have radically reimagined consumers’ shopping patterns and prompted merchants to go online quickly, consumer expectations remained the same. They want secure and seamless payment experience, especially now, when our reality is changing and scams are on the rise. This is why now more than ever, Visa is focused on helping merchants by providing them with an easy way for even more online shoppers to checkout quickly and securely, to build trust and drive business growth.

The early days of e-commerce

E-commerce looks very different today than it did 20 years ago. In the early days of the internet, when e-commerce sites first started popping up, merchants and banks had very few tools for verifying whether the person attempting payment was the actual cardholder. when personal computers were the only avenue for shopping online. Today, the e-commerce environment is mature and expanding, with consumers choosing among their laptop, tablet, mobile browser, and mobile apps. With so many ways to shop, retailers must make their payment process both secure and free of burdensome steps that lead to abandoned shopping carts. In 2001, Visa developed the 3-D Secure messaging protocol and Verified by Visa (VbV) authentication service to answer this new security challenge. The service gave consumers a secure method for authenticating themselves to their bank, helping to prevent fraudulent online transactions while giving all parties greater peace of mind.

Shopping cart abandonment: the major challenge for online retailers

A common mistake among new online merchants, for example, is to overcompensate for their fear of fraud by implementing security solutions that are so rigid that they prevent legitimate consumers from shopping and checking out with ease. Consumers hold an average of 23 password protected online accounts1, and one-third of them admit that they “very frequently” or “frequently” fail to complete online transactions due to password-related memory lapses2. About 24 percent3 of customers abandon the online purchasing process (what we call “abandoning the cart”) because they find it too complicated.

Even when consumers manage to make it to checkout, their transactions may still not go through. In fact 1 in 15 customers who are declined due to suspected fraud are actually legitimate with 58%4 either reducing or ceasing doing business with the merchant in question. Consumers whose transactions are declined may decide not to make their intended purchase at all, either because they do not have an alternative form of payment or because they’re unwilling to go through the process again. When customers are rejected for reasons they don’t understand, they are likely get frustrated not only with the failed transaction, but with the merchant itself, and even eCommerce in general, thus reducing the potential of future sales as well.

The solution: smarter digital identification

Fortunately, technology has advanced to the point where there no longer has to be a trade-off between strong online security and a great customer experience. Visa is taking a leadership role with such industry standards bodies as the FIDO (Fast Identity Online) Alliance, whose mission is to deliver authentication standards to help reduce the world’s over-reliance on passwords, and EMVCo., which facilitates worldwide interoperability and acceptance of secure payment transactions.

Visa Secure5, Visa’s new program governing online transactions uses the EMV 3-D Secure industry-wide messaging standard that merchants and issuing banks must follow to verify cardholder identity before a transaction is sent for authorization. EMV 3-D Secure is the next-generation version of 3DS 1.0, which Visa developed and owned, and which has been the market’s online security protocol for almost 20 years.

Visa Secure delivers greater fraud prevention by sharing up to ten times more data with issuers for better risk analysis and advanced decision making. This eventually helps both merchants and issuers detect and avoid fraud more effectively, while consumers can benefit from a smoother and more consistent user experience across multiple payment channels, including mobile web, in-app and digital wallet payments, without any comprise in security.

This risk-based authentication process also eliminates the need for the vast majority of cardholders to type in passwords to complete their online purchases, translating into fewer checkout steps (less friction) and fewer instances of false declines.

While the proliferation of connected devices has made it easier for consumers to purchase goods and services online, it has also introduced new challenges for combatting online fraud and providing frictionless checkout experiences. By allowing merchants and issuers to avoid and detect fraud more effectively, while enabling consumers to make secure, simple transactions with less friction across multiple payment channels, Visa’s new 3DS technology aims to resolve what has long been a dilemma for eCommerce players.

Supporting local businesses to shift online

While there is a high demand for e-commerce, to elevate further the capabilities of digital payment experiences in Georgia Visa has partnered with local banks for secure and widely available online payment capabilities for SMEs.

We all know that some businesses, small and medium in particular, have been forced to reduce or stop their activities significantly. With TBC Bank We launched a new project to help small and medium business in current situation. They can use Vendoo platform and offer their goods to consumers via this platform, or we can help them develop their own online store within a short time (up to 3 days) and integrate on-line payments. Additionally, merchants can use centralized delivery service and get marketing support for the goods they offer.

Visa in partnership with the Bank of Georgia and Farmers’ Association launched platform to support local farmers and help them sell more of their products. As a global company that operates a very local business, we recognize this need. We’re also committed to the long-term recovery and will continue to explore ways we can accelerate economic activity in line with our mission to help individuals, businesses and economies thrive and to ensure simple, reliable and flexible payments.

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