Nearly four in five (77 percent) British consumers are fearful of new payment methods.
New research conducted by Paul Hastings surveyed more than 2,000 UK consumers and highlights how security fears prevent many consumers from trying new payment technologies.
New payment method providers are often at the forefront of addressing security risks and consumer concerns through increased authentication, behaviour monitoring for fraud and tokenisation, which helps drive product and security innovation.
Around a quarter (27 percent) of British consumers don't currently use new payments methods. According to the report, the main reason for UK consumers not wanting to use new payment methods was the risk of fraud (59 percent), followed by data security incidents (49 percent) and the risk of theft (45 percent).
Almost half (49 percent) of respondents said a reduced risk of fraud was the most desirable feature of a new payment method.
“Many British consumers have yet to make the most of the variety of new payment methods at their fingertips, with concerns around fraud and theft appearing to be an issue (even though the same concerns may often apply to traditional payment methods). Assuaging these concerns is one of the most important challenges facing the adoption of emerging payment methods often at the vanguard of developing and adopting ways to tackle fraud risks, while regulatory developments such as the Second Payments Services Directive are concurrently working to address security risks to the benefit of the consumers,” said Ben Regnard-Weinrabe, partner in the global banking & payment systems practice at Paul Hastings in a press release accompanying the report's launch.
He adds, “Traditional providers occasionally suffer well-publicised hacks which they are perhaps better placed to weather given their long-established reputations in financial services. New payments providers often don't share this incumbent advantage and therefore security is inexorably linked to the success of their business, which is why they are likely to put significant financial investment into ensuring their payment systems are robust against the threat of fraud.”
The research highlights the importance of security as a positive benefit for online services and a reason to emphasise the need to imbed cyber-security at the design stage of product development.