According to the 2014 Consumer Authentication Survey released by CardinalCommerce, at least 75% of issuers, gateways and card associations support Consumer Authentication programs. More than 66% of acquirers and payment service providers along with more than half of fraud vendors and ecommerce platforms also support Consumer Authentication.
When it comes to merchants, the reports shows that almost half of those surveyed were merchants currently using Consumer Authentication. 90% of respondents who use a Consumer Authentication program believe the program is somewhat to highly valuable. Only 3% overall stated that Consumer Authentication has no value. 81% of merchants are happy with their Consumer Authentication solution. Additionally, for those that are using it already, once it is implemented as a technique in their program they tend to stick with it.
The same source points out that merchants in North America had the lowest usage base for Consumer Authentication services with only 45%, while all other regions had at least 60% of merchants enrolled in at least one program. The survey finds that North America is a laggard in adoption in Consumer Authentication across all the different players in the ecosystem. In other geographic areas, merchants and consumers are more used to 3D Secure protocols such as Verified by Visa and MasterCard SecureCode, and this is commonly seen as a good way to help consumers feel confident with online purchases, combatting fraud and controlling chargebacks.
Research also reveals that fluctuations in adoption rate did not just follow regional boundaries, the industry and vertical market as well as the size of a business also played a key role in adoption. Higher risk industries and those selling higher USD goods or services are more likely to use Consumer Authentication, mainly because they have the incentive to limit fraud risk and liability. Examples are computers/electronics, jewelry and travel, where more than half of merchants across the board are enrolled in a Consumer Authentication program.
Larger merchants are more likely to use Consumer Authentication. They are also the most likely to support Verified by Visa and MasterCard SecureCode. Amongst merchants with an annual revenue greater than USD 50 million, 93% support Verified by Visa and 83% MasterCard SecureCode. Smaller merchants are more likely to use alternative forms of authentication, such as e-mail verification or Google Authenticator.
The survey mentions that amongst merchants currently not using Consumer Authentication, 20% are concerned with the effect it might have on sales conversion and 13% worry about changing the user experience. Almost 1/3 of respondents not using Consumer Authentication have concerns about its impact on users and conversion.
There is a historical reason for this concern, as many consumers were not aware of these programs as they were rolled out, and there has been some negative impact in these areas. North America isn’t as used to Consumer Authentication as they are in other parts of the world. In the European Union, for instance, these programs are common, and both merchants and consumers are comfortable with the solutions and how they work.
The report is based on a sample of 443 organizations worldwide across the payment landscape and included businesses of all types and sizes.
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