Paysafe finds US reluctance to move on from password authentication


More than two thirds of Americans (68 per cent) and 70 per cent of Canadians worry about being able to pay for goods or services without being asked for a password.

That’s according to a research study – ‘Lost in Transaction: The end of risk?’ – by Paysafe into changing views on payments across the US, Canada, Germany, Austria, UK and Bulgaria, prior to the roll-out of Strong Customer Authentication (SCA) later this year.

The same report found that over half of consumers in both the US (52 per cent) and Canada (53 per cent) are worried that the shift to biometrics to authenticate online payments will dramatically increase identity fraud.

Meanwhile, more than four fifths of consumers in the US (81 per cent) and Canada (83 per cent) still favour passwords for making payments online due to concerns about the security of new biometric options. Just 34 per cent of Americans and 40 per cent of Canadians believe that biometrics are more secure than other authentication methods.

The research, which found that consumers identified a lack of trust as the primary reason for avoiding biometrics, also revealed that 49 per cent of Canadians and 39 per cent of Americans did not want companies to have access to their personal biometric details. Nearly a third of Americans (29 per cent) were concerned that their fingerprint could easily be cloned and used to commit fraud.

Daniel Kornitzer, Chief Business Development Officer at Paysafe Group, said: “Biometrics are a huge opportunity for the payments industry to combat the increasing risk of card not present fraud. However, it’s not surprising that there is reluctance among consumers to use biometrics as a form of payment authentication when passwords and PINs have been the central pillar of financial data security for at least 20 years.

“News headlines are also dominated by fraud and hacking scandals, so the public are aware of the risks involved when it comes to adopting new services. To overcome this, consumer education is imperative and with SCA coming in September, consumers will need to be aware of the benefits to ensure acceptance and adoption. We’ve lived in a password-driven world for many years now and consumers aren’t fully prepared to let go of what they know.”

Despite the worries over biometric transactions, adoption continues to grow with close to half (46 per cent) of North American consumers having used biometrics. Well over half of US and Canadian consumers (56 per cent and 59 per cent) also agree that using biometrics is a quicker and more efficient way of paying for goods and services.

Kornitzer continued: “Consumer acceptance of biometrics is being driven largely by smartphone usage and adoption, and this will only increase. However, payment providers will need to do their bit to get consumers on board. Ultimately, SCA should lead to smoother and more secure payments – a win for businesses and consumers alike.”

To read the report in full, click here.