The future of payments post-Brexit: what to consider to move with the times
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WHITE PAPER The future of payments post-Brexit: what to consider to move with the times The global pandemic continues to rule the globe, while Brexit only doubles the strain for businesses trading in or with the UK. To help companies adapt to this ever-changing environment, as well as to facilitate successful post-Brexit and Covid-19-influenced trade, we have summarized key findings, statistics, and forecasts for online businesses.
Table of Content
Methodology 2
Introduction 3
State of payments in the UK 5-11
• Digital wallet use growing across age groups
• A convenient customer journey is essential
• Fraud on the rise
How business is changing 12-17
• Brexit, regulatory disruption and cross-border payments
• Adapting to changes in consumer behaviour
• A spotlight on fraud
Key learnings and recommendations 18-27
• Making post-Brexit trade easier
• Data-driven payment experience
• Tackling fraud
Conclusion 28-29
Methodology
This whitepaper is built on insights from two surveys: one of 1,002 UK consumers and
one of 500 business leaders in the UK, conducted by ECOMMPAY in collaboration with
Censuswide. The research was completed in March 2021.
Payment Solutions to Grow Your Business 2
Introduction
The seismic events of the past 12 months have had far-reaching implications for the UK,
with both Brexit and the pandemic disrupting the economy significantly. Covid-19 has
fundamentally impacted the way we live and work, transforming the way consumers
perceive commerce and payment options. With the virus limiting face-to-face interactions,
there has been a flood of new adopters to digital transactions and e-commerce.
To cater to these shifts in buying behaviour, businesses have had to move online and
evolve to provide faster and safer payment transactions for customers and clients. What
amounts to 10 years of transformation has been accelerated across just over a year. The
pandemic has therefore driven digitalisation and the rapid adoption of technology at
breakneck speed.
Payment Solutions to Grow Your Business 3
Mastercard recently announced that 78% of its transactions across Europe were
contactless in 2020; evidently, huge numbers of businesses have adopted technologies
such as online gateways, NFC terminals and QR codes. Consumers are more comfortable
than ever using contactless payment methods and operating in the online environment.
According to ECOMMPAY statistics, demand for alternative payment
methods increased by 35% in 2020 and is expected to grow by 40-50%
in 2021.
Meanwhile, Brexit has heralded the beginning of a new financial era. The UK is seeking
to exercise its independence, redefining its regulatory approach and aiming to champion
flexibility and innovation within the financial sector. Such rapid change has been disruptive
for many, since disentangling from the EU after 48 years of integration is no mean feat.
Payments is an area not exempt from such challenges; billions in payments move between
the UK and the EU every year, with much of this having been regulated historically by EU
legislation such as the Payment Services Directive 2 (PSD2) and the Single Euro Payments
Area (SEPA). With the new framework still in a state of flux, some aspects of UK-EU
commerce can be compared to navigating an ambiguous no man’s land. Looking ahead,
businesses will be needing to consider how to maintain the seamless digital experience
that the modern consumer now demands, and look at how they can protect business
continuity while realigning to new customer payment needs.
78%
CONTACTLES
TRANSACTIONS ACROSS
EUROPE IN 2020
Payment Solutions to Grow Your Business 4
State of payments
in the UK
Our habits and payment preferences are shifting, with the move to digital and contactless
payments firmly here to stay. There are many unknowns about which trends will continue
when the pandemic is under full control, but what is clear is that convenience will be the
decisive factor, and that digital access to goods and services saves time and effort for the
consumer.
The UK’s repeated implementation of lockdowns that limit physical interactions have
combined with evolving attitudes towards cash and contactless payment methods. This
has resulted in a radical shift in people’s purchasing habits, which look set to continue
post-Brexit.
Online payments are easier than using cash, and now all generations have begun to move
away from cash and towards such modern payment methods. Where previously, older
generations might have been slow to adopt new technology, during the pandemic, such
online payments provided critical protection from exposure to the virus, and proved a
motivator in accelerating older people’s adoption of new payment technologies.
Payment Solutions to Grow Your Business 5
Digital wallet use growing across age groups
20%
CONSUMERS
began using digital
wallets
Mobile wallet usage is one such area that has seen huge growth during the pandemic.
Such technology involves the software-based system that securely stores users’ payment
information and passwords for several payment methods and websites, so that users can
carry out payments at pace and securely.
Digital wallet usage has tripled in three years, and is predicted to pay
for over 52% of e-commerce transactions by 2023.
Our own research has shown that older generations are embracing these new payments
technologies more than ever before; ECOMMPAY’s research of 1,002 UK consumers in
March 2021 found that one in five (21%) of 45-54 year-olds increased their digital wallet
usage during the pandemic, and more than half (51%) of over 55s have used a digital
wallet. Looking across generations, 20% of consumers began using digital wallets for the
first time or regularly during the pandemic, indicative of the wider uptake of contactless
payment options as consumers turned away from cash during the last year.
Younger people – 16% of whom said they only pay using digital wallets – also continued
their move towards contactless payment methods, with 44% of Gen Z increasing their
digital wallet usage during the pandemic. Nearly four in 10 (38%) of Brits currently have a
digital wallet stored on their phone.
Payment Solutions to Grow Your Business 6
INCREASED THEIR DIGITAL WILL SHOP MORE ONLINE
WALLET USAGE THAN IN-STORE
21% 44% 31% 19%
OLDER PEOPLE GEN Z OLDER PEOPLE YOUNGER PEOPLE
Experts have predicted the death of cash for decades, but despite a decline in usage over
the last few years, cash was very much in circulation pre-pandemic, making up 14.6% of
transactions in 2019. Covid-19, however, appears to have hastened cash’s demise, with
data revealing a 48% decline in cash withdrawals in 2021 compared to the same period in
2020. Indeed, ECOMMPAY’s own research finds that over two thirds (68%) of people say
they have used cash less frequently compared to before the pandemic, indicating that
there will be a definitive shift away from cash payments going forwards.
Further attesting to this, a third (31%) of people said that the pandemic
has changed their preferred payment method, demonstrating these
new habits are set to stay.
Though coronavirus restrictions are being loosened at the time of writing, consumer
behaviour looks unlikely to return to pre-pandemic patterns. When it comes to retail, fewer
than a third (30%) of people say they will mainly shop in a store, even with a reduced
Covid-19 threat.
Older generations have been encouraged to shop more online than in store, and look set
to continue even once the pandemic is over; while only 19% of 16 to 24-year-olds say they
will shop more online than in-store, 31% of 45 to 54-year-olds will. Women are less likely to
return to predominantly shopping in-store, with only 38% sure they will, compared to 43%
of men. Online spending looks like it will continue to grow; 10% said that they intend to
increase their online spending even once the pandemic is over.
Payment Solutions to Grow Your Business 7
A convenient customer journey is essential
+8%
CART ABANDONMENT
RATES
March 2020
With contactless payments and online shopping making purchases quicker and easier for
consumers than ever before, it is evident that shoppers going forward will expect their
user experience to be quick and easy. Cart abandonment rates are typically affected by
number of factors including:
Length of the Price of the What payment options
checkout process product are available
If the payment The navigation between Complexity of the
page looks secure the website and the payment process
payment page
Payment Solutions to Grow Your Business 8
During the pandemic, interesting behaviours were recorded, such as people filling
shopping carts but logging off without paying, as a replacement for real-life window
shopping. In March 2020, for example, cart abandonment rates were 8% higher than usual
as the pandemic took a hold. This then decreased by 20% by March 2021 as consumers
adjusted to a new normal of shopping predominantly online.
ECOMMPAY’s data finds almost three-quarters (71%) of Brits would be
likely to abandon their checkout process if their preferred payment
method was not available, emphasising the importance of offering
multiple payment methods that work best for customers. Indeed, 72%
said that the payment process is somewhat or very important to their
perception of brand experience.
As online shopping becomes ever more competitive, every aspect of the consumer
journey will become ever more critical – and that includes the payment process. A high
cart abandonment rate often points to a poor user experience, and this could involve a
complicated checkout flow.
When asked about the specific elements that might cause them to abandon a checkout,
the most common reason cited was expensive delivery of service fees (44%) – a
particularly pertinent issue post-Brexit, followed by concerns about the security or
legitimacy of the payment page (37%) and being asked for too much information (31%).
One in 10 (10%) also said they would abandon their checkout if there was no local payment
method available. The data points to the need for businesses to provide a carefully
curated payment page that puts the consumer first and prioritises efficiency, transparency
and variety of choice.
The most common reasons to abandon a checkout
Expensive delivery Concerns about the Being asked too No local payment
of service fees security/ legitimacy much information method available
Payment Solutions to Grow Your Business 9
Fraud on the rise
21%
OF CONSUMERS
have experienced
more fraud
Security around online payments is another concern at present for Brits. ECOMMPAY’s
research found that 21% of consumers have experienced more fraud or attempted fraud
during the pandemic. Covid-19, as a time of crisis and chaos, has provided a multitude of
opportunities for criminals to target weaknesses and exploit the vulnerable, given people’s
dependence on online shopping methods.
Many people have been using digital channels for the first time – especially the young,
as well as the old— and are therefore particularly susceptible to fraud. There has been
a significant increase in investment scams, as well as cybercrime including elder abuse,
e-commerce scams and impersonation scams, among much else.
Many fraudsters dupe consumers out of money by asking for payments
for seemingly legitimate reasons, while there have been a growing
number of mobile transaction fraud such as account takeovers and
stolen card data.
According to ECOMMPAY’s own transaction data, the UK has had the highest attempted
fraud level among EU countries in the past year. Fraudsters have been taking advantage
of more sophisticated online methods to steal and illegally use money. Card fraud is
increasingly popular amongst criminals, where fraudsters can double their earnings selling
card data on the black market. Indeed, such schemes whereby fraudsters buy and sell
stolen payment cards on the dark web increased by 34% in the third quarter of 2020.
Payment Solutions to Grow Your Business 10These issues are also exacerbated by merchants’ insufficient knowledge of fraud
prevention strategies and consumers taking few safety precautions. These scenarios
include where merchants disable part of the client or customer verification process, for
example a feature where the user takes a ‘selfie’ with the payment card to verify their
identity, and also when merchants allow people to add an unlimited number of payment
cards to one account, allowing fraudsters to register with their personal card and add
stolen payment cards afterwards.
Compounding this, the UK’s change to the contactless payment limit
is believed by many experts to have increased the risk of offline fraud.
The UK increased the limit to £100 for the first time in March 2021. Even
if the number of fraud cases stays the same under the increased limit,
the losses could double.
As such, compliance and anti-money laundering (AML) teams are under mounting
pressure to learn and adjust to these circumstances at speed, while also having to adapt
themselves to new ways of working remotely or with limited or reduced resources,
combined with the growing volumes of scams.
Brexit is also a factor in consumer confidence around fraud, with 18% of consumers
remaining very worried about the security of online payments post-Brexit across borders
in particular, pointing to a lack of communication between merchants and their customers
around the implications of Brexit and the safety measures being taken to mitigate risks
and safeguard consumers.
18% 68% +34%
CONSUMERS CONSUMERS FRAUDSTERS
worried about the security concerned about the cost buy and sell stolen payment
of online payments of online goods cards on the dark web
Brexit is also proving a significant factor in influencing consumer payment behaviour.
Nearly seven in 10 (68%) are concerned about the cost of goods for online cross-border
purchases post-Brexit, with two thirds (67%) making international online purchases at least
once a year, and 21% doing so every two to six months.
Payment Solutions to Grow Your Business 11How business
is changing
With customer behaviour changes, technology innovations and Brexit all working together
to alter the lay of the land, businesses are finding new and different ways to reach the
customer and facilitate payments. So how are businesses adapting to cater to these shifts?
What are the biggest barriers for businesses looking to scale or expand overseas at
present, and how is Brexit influencing them?
Brexit, regulatory disruption &
cross-border payments
Brexit has posed a number of challenges from a regulatory perspective, some of which
have complicated certain payment services, with the UK now coming under the remit of
regulatory limits on cross-border transactions. Following the UK’s exit from the EU, the
country is no longer covered by EU regulation, which limited interchange fees on intra-
EU card-based transactions. These fees constitute the percentage of the purchase paid
by the retailer to the bank when a credit or debit card is used, and has been capped
by the EU since 2015 across the European Economic Area (EEA). Fees were previously
limited to 0.3% of the value of the transaction for credit cards, and 0.2% of the value of the
transaction for debit cards.
Payment Solutions to Grow Your Business 12INCREASED FEES TO 1.5%
OF THE PURCHASE FOR
CREDIT CARDS, AND 1.15%
FOR DEBIT CARDS
Now that these limits have been removed, businesses have been free to increase the
fees that EU merchants must pay when receiving orders from the UK. Mastercard took this
action, for example, when they increased fees to 1.5% of the purchase for credit cards, and
1.15% for debit cards.
UK-based payment providers have also lost their automatic EU passporting rights. As such,
they cannot provide services in EU member states without confirming they are compliant
under the new regulations.
Third-party providers (TPPs) are also able to use an alternative to eIDAS certifications to
access customer information from account providers, or to initiate payments according to
the FCA, since eIDAS certifications of UK TPPs have been revoked. This provides TPPs
with a compliant way to access customer information.
ECOMMPAY’s research of 500 business leaders in March 2021 found
that over a third (35%) of UK businesses have lost revenue from
cross-border card payments post-Brexit, with the average revenue
lost being £66,812.
Indeed, almost a fifth (18%) of businesses have lost between £10,000 and £50,000 from
cross-border card payments since Brexit, and one in 10 (11%) lost between £50,000 and
£1 million. In particular, London businesses have been badly affected, with over half
(51%) losing money from cross-border payments, compared to only a quarter (25%) of
businesses in the East of England, 19% in the North East, and just 13% in Wales.
Payment Solutions to Grow Your Business 13Bigger companies are also being more impacted by Brexit; ECOMMPAY
data showed that under a quarter (24%) of businesses with less than
nine employees had lost money through online payments across
borders, next to a significant 52% of businesses with over 100 workers.
On top of these losses, there is also a large amount of uncertainty about the best way
to reach EU customers to facilitate payments post-Brexit; more than a quarter (26%) of
businesses are not clear on the best methods to do so. Meanwhile, almost a third (29%)
say complex regulation post-Brexit is the biggest barrier to free trade with the EU at
present, with the next biggest issues being border control problems (24%), lack of clarity
around law changes (22%) and lack of local European knowledge (16%). Almost one in
five (17%) of UK businesses name Brexit issues as the biggest barrier to their overseas
expansion at present.
Barriers to facilitate payments post-Brexit: UK businesses biggest concerns
29% 26% 24% 22% 16%
Complex Not clear about Border control Lack of clarity Lack of local
regulation the best methods problems around law changes European knowledge
With a number of payment methods becoming more expensive, both merchants and
consumers are seeking alternatives, with clients more open to new choices. Payment
service providers have the opportunity to provide more options for their customers, not
just in terms of card payment networks, but also with companies looking at solutions such
as Telegram payments.
Open Banking has continued to drive innovation within the payments
sector, too.
Payment Solutions to Grow Your Business 14While bank-based payments are convenient and less expensive, they are frequently
slower and carry a higher risk of fraud. Open Banking reduces these risks, with many
payment providers having moved to take advantage of this technology. Organisations are
incorporating this technology so that customers can pay merchants without needing to
go via an expensive intermediary. As such, it is an appealing solution for those looking to
provide payments within and across borders while avoiding post-Brexit fees.
The growth of digital wallet use
Digital wallet usage is also on the rise. Since providers of wallets only require an e-money
licence, which is easier to obtain than a full banking license, many are attracted by
the greater efficiency and convenience. Therefore, merchants seeking to continue or
embark upon cross-border commerce are finding they need to monitor new technologies
including e-wallets, open banking and messenger app-based payments to ensure they
are providing customers with the best possible payment experience in a new and shifting
environment. Establishing relationships with the right payment providers will be critical to
post-Brexit success, and investment in payments infrastructure is clearly imperative.
POST-BREXIT SUCCESS
— ESTABLISHING
RELATIONSHIPS WITH
THE RIGHT PAYMENT
PROVIDERS
Payment Solutions to Grow Your Business 15Adapting to changes in consumer behaviour
The pace of change in consumer behaviour, compounded by the impact of Brexit, means
that many businesses are at risk of stagnation if they are relying on existing payment
capabilities to help them during these difficult times.
Much of businesses’ pre-existing infrastructure will be unable
to manage increased or changing demand.
A fifth (20%) of businesses do not feel their business has adequate payment processes in
place to adapt to rapid changes in consumer habits, while 11% are concerned about a lack
of local knowledge for reaching new markets, and 10% say they have a dearth of expertise
within the business.
When looking to scale, 20% of UK businesses find adopting digital technology to be a
major pain point, while over a quarter (26%) have difficulty recruiting the right talent, and
15% have a lack of support from stakeholders. The data indicates many businesses will
need to look to expert partners to support them in rapid digitisation and in making the
necessary changes to find simple and reliable payment solutions that will enable them to
adapt to new payment behaviours. Likewise, almost one in five (19%) of businesses say
problems understanding local regulations is a significant barrier to their growth, pointing to
the need for expert guidance when reaching new markets. For many businesses, it will be
critical that there is a move to put digital at the core of company culture.
Major pain points of UK businesses in light of consumer behaviour changes
26% 20% 15%
Difficulty recruiting Adopting digital Lack of stakeholders’
the right talent technology support
Payment Solutions to Grow Your Business 16A spotlight on fraud
New payment behaviours, new adopters of digital technology, and the chaos of the
pandemic has meant businesses, as well as consumers, have been increasingly suffering
from high levels of fraud around online payments. According to a survey of 500 UK
business leaders, commissioned by ECOMMPAY, nearly four in 10 (37%) businesses say
they have lost money due to fraud on UK online payments during the pandemic, with the
average amount lost to fraud being £2,346. London businesses appear to have suffered
more from online payment fraud in the past year than those in other cities, with almost half
(49%) admitting they had lost money due to fraud, contrasted with the East of England,
where only a quarter (26%) had done so. Evidently, as we move to a post-Brexit and post-
pandemic world, businesses will need to prioritise AML and fraud detection technologies
and strategies.
The global AML market size is expected to reach $3.19bn by 2028 as
businesses grapple with growing volumes of non-cash transactions and
the rise in technological developments in the fintech sector.
37%
BUSINESSES
lost money due to fraud
during the pandemic
Payment Solutions to Grow Your Business 17Key learnings and
recommendations
Businesses feel out of step with fast-changing consumer habits when it comes to
providing adequate payment processes, pointing to the need for companies to select a
payment provider with data-driven payment solutions. Such a provider must be able to
create the tailored technologies suited to individual business needs, as well as to the
needs of customers and clients.
Innovations are inevitable, so businesses must ensure they are not left behind. Key
factors halting such innovation are usually legacy systems, high costs, and an outdated
management mindset or lack of digital culture within a business. Those who are not
adapting effectively to the new normal tend to have prioritised short-term costs but they
need to take a longer-term view and invest in the right partners to support sustainable
growth.
Since payment behaviours are changing fast, businesses need to ensure they are
partnering with payment providers with data-driven payment solutions. Such solutions can
make an online business competitive now, as well as ensuring it is ready for the future.
Solutions must be easily scalable and adaptable to cater to shifting needs and a fast-
evolving payment environment.
Payment Solutions to Grow Your Business 18Legacy systems can be a more complicated issue, since these are frequently deeply
integrated into key operational processes. For businesses to innovate, they must
think of such innovation as a necessary shift in creating a better and more responsive
environment.
As a result of the pandemic, for example, people are using less
cash and more e-commerce solutions. Such innovations have come
about to cater to a dramatic change in society. As such, businesses
should evaluate the current social and economic factors and consider
customers’ preferences and common problems.
There is no need to reinvent the wheel; businesses can simply leverage existing
technologies to address different issues. For example, ApplePay involves card
tokenisation and biometrics – technologies introduced long before ApplePay existed.
However, ApplePay is now massively popular because it combines those technologies,
providing an e-commerce solution for customers that solves real issues, allowing clients
to save card details securely on their devices.
PAYMENT SOLUTIONS
MUST BE EASILY
SCALABLE AND
ADAPTABLE
Payment Solutions to Grow Your Business 19Making post-Brexit trade easier
38%
BUSINESSES
worried about new
EU SCA anti-fraud
standards
The fact that a number of businesses have lost money from cross-border payments post-
Brexit indicates some acquirers have already increased the fees while preparing for the
increased fees of international payment systems.
With 38% of businesses worried their company’s payment processes won’t comply with
new EU SCA anti-fraud standards, it is clear that the fintech and e-commerce industries
must prepare for scenarios in which the UK could develop its own regulatory systems,
similar to the EU’s own licences. Here are some suggestions for how companies can
prepare.
1. Offer payment choice
Companies should give clients the maximum possible choice of payment methods. They
must also provide clear guidance as to the benefits and drawbacks of each of the choices,
ensuring that clients will be best placed to take advantage.
2. Unify payment providers via a single dashboard
They must also find a way to manage all payment providers via a single dashboard. Such
unified infrastructure enables merchants to manage all payment providers so that if your
business conducts payments and mass payouts through multiple local acquirers and
payment providers, you can manage all channels in one simple place. These systems
Payment Solutions to Grow Your Business 20are flexible, automatically directing payments to the appropriate channels and cascading
through alternative routes if and when the payment system fails. This means the maximum
number of payments can succeed, increasing the value limit per recipient and cutting
financial costs.
An example of this in action would be if a merchant sends a request for
payouts in USD, EUR, and RUB to cards Visa, Mastercard, and Amex.
The system dynamically calculates the optimal route for each payment
based on geography, card type, currency, device type, channel
availability, and other user-set parameters.
3. Provide local expertise and presence
When navigating cross-border trade, businesses must choose a payment provider with
local expertise and a presence in both Europe and the UK. They should look to local
banks or online payment gateway providers that work in local markets and can process
such local card payments. However, since you are not their key audience, signing a
direct contract often requires additional integration or might require you to open a local
representative office.
ENSURE YOUR PAYMENT
PROVIDER HAS SEVERAL
DATA CENTRES IN
THE REGION YOU ARE
OPERATING IN
International payment companies can be another option here, as they are able to provide
a wide range of payment services with one contract and one integration. Key points to
keep in mind include ensuring you hire customer support staff that speak local languages,
Payment Solutions to Grow Your Business 21and ensure the payment provider can translate and rebrand your payment page to suit
local markets. International online payments must also have good anti-fraud solutions, and
regional differences matter. Businesses will need to work closely with payment providers
to find the security settings best suited to their needs and the main patterns of their user
behaviour.
You should also ensure your payment provider has several data centres in the region you
are operating in, since a short geographical distance between the data centre and the end
user increases network speed by 15% and ensures infrastructure stability. For example, if
one data centre fails, there are back-up options. This means your customer experience is
improved.
4. Ensure you have an expert and tailored approach
Businesses should look to payment providers offering an expert to expert approach,
where there are experienced staff members dedicated to particular target industries.
Payment providers offering customer service support 24/7, dedicated
and personal account managers and fast response times to queries or
issues mean you can solve problems at pace and maintain a smooth
customer journey.
At such a time of flux as companies deal with the fallout from Brexit as well as the
pandemic, and struggle to keep pace with the pace of change when it comes to consumer
behaviour, a tailored approach is also critical so that you can adapt at speed.
We’re unlikely to see the full effects of Brexit for some time, but the UK payments sector
will be key in driving any future economic success, and establishing relationships with the
correct payment providers will be integral to any post-Brexit success.
Payment Solutions to Grow Your Business 22Data-driven payment experience
Businesses must consider ways to reduce the percentage of abandoned checkouts and
move to improve conversion rates and customer experience. The following strategies can
be used to do this:
Payment page design
One priority in tackling abandoned checkouts is the design of the payment page,
which should be the same as the design of the site so that users gain a smooth
and consistent experience, thereby improving user confidence in the payment
process.
For improved conversion levels and customer experience, the payment or
checkout page should not contain unnecessary elements such as ads or calls to
action for faster payments. These function as distracting details which ultimately
detract from the payment process and complicate the user experience.
DO DON’T
Data collection
When it comes to data collection, businesses should clearly show the required
and optional fields, and display fields that are easier to fill in first, so as to ease
the customer into the data collection process gradually.
Payment Solutions to Grow Your Business 23Localised elements
When serving customers from other regions, a localised payment page is crucial.
Make sure your page displays understandable language options, local currencies,
as well as local payment options so that the customer feels their needs are well
catered to. Where possible, a selection of payment methods is preferable so that
the end user has agency over how they wish to pay, and can select the option
most suitable to their needs or preferences.
Security
Given consumers’ growing fears around the security of payments, and the rise of
fraud cases in the UK in particular, it is also important to emphasise the security
of your payment page. Displaying the logos of payment systems can help
communicate authenticity, while you should also look to display the certification
of PCI DSS, Visa Secure and Mastercard ID Check, as well as detailed information
about privacy policy, so that users feel their data is secure and being used in a
safe way.
Dealing with errors
In order to facilitate a smooth customer payment experience, the devil is often in
the detail. Ensuring the user can correct any errors in their data when entering
personal and card information, without erasing fields they have already filled in,
is key in managing customer frustration and making sure the process is efficient
and the user is less likely to abandon the checkout. Wrongly filled fields need to
be clearly flagged to the user before they press the pay button.
The omnichannel experience
In our current fast-paced society, customers are increasingly making purchases
on the go using smart devices. This means the payment page must be adaptable
and responsive for use on different devices and screens effectively, to provide a
successful omnichannel experience. Customer convenience is king, which means
it must be simple for the user to travel from your website to your payment page
and vice versa.
Payment Solutions to Grow Your Business 24Tackling fraud
97%
ECOMMPAY’s
fraud detection rate
Many compliance teams comprehend the demand for more efficient and flexible
technology. Even before the pandemic, many compliance teams were already under
pressure to decrease the number of false positives, and this has only been amplified in
the past year. The increase in the number of online transactions commensurates with the
increase in fraud level. The number of bots used is also growing rapidly, which increases
the likelihood of cyber attacks.
As such, there is a growing demand for merchant initiated transactions and for transaction
risk analysis to improve cyber defences. Many financial institutions are seeing the benefits
of collaboration, and there are also several new initiatives and technologies emerging to
facilitate the sharing of intelligence and enable institutions to better fight crime.
However, there are several aspects of merchants’ insufficient approaches to business
strategy that must be addressed. Firstly, many merchants are disabling aspects of client/
consumer verification steps.
For example, some businesses have removed the need for the
consumer to take a selfie with a payment card. Secondly, merchants
are frequently allowing the addition of an unlimited number of payment
cards to one account. This means fraudsters can register large
numbers of stolen payment cards to the system after the first ‘real’ card
has been logged.
Payment Solutions to Grow Your Business 25Merchants are taking these steps in an attempt to grow conversion rates and attract
new customers, but this is a short-term approach. In the long term, businesses risk major
reputational damage, and can be blacklisted by payment systems.
To tackle fraud, merchants need improved knowledge of fraud
prevention strategies, and to make sure their customers are educated
in the ways in which fraud can be carried out. Merchants must ensure
they are not disabling any parts of the customer verification process,
and are limiting the number of payment cards that can be registered to
one account.
Payment providers can implement risk control systems and leverage machine learning to
gather and analyse historical transaction data in real-time. This technology can be used to
identify fraudulent patterns, as well as to better build a picture of where fraudsters may be
linked. Such technology means payment providers can identify and eradicate fraud, and
also create remediation plans for each fraud attack. ECOMMPAY, for instance, is teaching
its proprietary Risk Control System with machine learning.
The system accumulates and analyses all historical data about transactions in real time,
boasting a 97% fraud detection rate thanks to its use of AI and machine learning. Based
on this research and fraudulent activities the system identifies, it can determine the
fraudulent patterns at play and also the fraudsters’ online footprint. For example, one
finding from the system is that fraudsters are generally connected to one another, and also
are often connected with their victims in some way. Manual processes accompany this,
with managers analysing transactions too and looking for correlations among fraudulent
transactions. The company also analyses each company’s transactions separately from
each other to understand the specific fraud patterns of a given business and help mitigate
risks by creating remediation plans for each fraud attack.
How does machine learning work in anti-fraud systems?
Education must not be overlooked either. Online businesses must be well-informed about
KYC in AML, potential and common fraudulent patterns, and threats. Further, the end-user
must be made aware of how to mitigate fraud. When users upload payment card photos to
the internet – for example, over social media – data is not always secure and is at risk of
Payment Solutions to Grow Your Business 26being stolen. Keeping a photo of a payment card on your phone is also unsafe, since this
data can be stolen. Encouraging users to follow simple digital hygiene rules will therefore
help, such as regularly changing passwords, encrypting messages, and not opening
unfamiliar links or files of unknown or suspicious origin.
It is clear online payment methods and contactless payment methods made offline are
here to stay, which means the finance industry needs to work to educate businesses,
as well as the end consumer on how to minimise levels of both online and offline fraud.
Compliance and financial intelligence teams must evolve to cope with growing numbers
of contactless transactions. It will be crucial that business work with trusted payment
providers leveraging technology to reduce risk and minimise fraud.
ENCOURAGING
USERS TO FOLLOW
SIMPLE DIGITAL
HYGIENE RULES
Risk Control Systems experts or antifraud specialists are also critical
for monitoring suspicious activity flagged by AI and deciding whether
to process or block a transaction. Using technologies alongside expert
support means around 97% of fraud can be effectively detected.
Payment Solutions to Grow Your Business 27Conclusion
The pandemic has served to accelerate the trends of the future. Businesses will adapt or
fail, and fintech will play a critical role in offering the necessary payment solutions to keep
pace with demand. With Brexit disrupting dynamics further, there are a number of ways
companies will need to adjust.
The digitisation of e-commerce looks set to continue apace, increasing the demand
for new payment products that will be faster, safer, and provide more choice for the
user. Consumers and businesses alike are increasingly looking for options that provide
immediate payments – but this speed must not come at the expense of security, which
must also keep evolving.
As such, the latest security measures will be critical for payment providers to stay ahead
of fast-adapting criminals. More financial institutions will adopt forms of multifactor
authentication, from biometrics to one-time passwords. Machine learning will be
increasingly utilised to build individual risk profiles, while regulatory bodies will need to
update their frameworks to incorporate new means of protection.
Payment Solutions to Grow Your Business 28With businesses looking for new ways to reach their target audiences, online companies
will benefit from a mixture of payment methods that can provide the appropriate
geographical coverage, and facilitate speed, simplicity and a seamless user experience.
Younger generations are no longer the driving force behind the digitisation of payments,
which means different users will have differing preferences.
Choice will be key in catering to this range of needs and in allowing businesses to scale
successfully into new markets.
User experience will be a priority as we look forward. There are now over three billion
smartphone users globally, while 59% of the global population uses the internet—
and these figures will only increase. Consumers are shopping and making payments
on a number of different devices, which means businesses must deliver a seamless
omnichannel experience. As such, the checkout processes must match the shopping
experience and there will be a growing demand for integrated payment pages that avoid
redirects and provide compatibility with multiple devices.
Business processes must constantly evolve to respond to their environment and be
optimised and innovated as these environments change. Partnering with companies that
can facilitate a tailored and data-driven approach to payments will be key. Companies will
therefore need to consider the strategy best suited to their unique corporate structure and
aims, but must lose no time in moving to meet the future.
Payment Solutions to Grow Your Business 29Payment solutions
to help your business grow
globally
Take your business to the next level
100+ payment methods
Localisation services into 21 languages
Customisation options
Multilingual support 24/7
Dedicated client manager
Unrivalled coverage across Europe, CIS and Asia
Get in touch with us to receive an individual consultation on cross-
border trade. Let our experts analyse your business and find the
payment solutions tailored to your needs.
Grow your business with ECOMMPAY
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