Innovators in the payments world are seeking to decrease dependency on cash payments by increasing development in the payment technology world. However recent studies have shown that general acceptance of new payment technology has its drawbacks as security has been found to be an issue for potential customers who are starting to use new payment systems.
A new study carried out by the Ponemon Institute has found that consumer demands, that have put pressure on the development of payment systems, has caused anxiety about security. However it is due to this demand from the customers who could have their security compromised, that has prompted this rush to develop new technology. Out of the 748 security, I.T., risk management, product development and other payment based professionals who are all based in the U.S., almost 70% thought this pressure to adopt new convenient systems could threaten the security of customers.
A quite worrying 53% of those surveyed stated that they’d rather better customer convenience than security. This in my opinion is made worse by the fact that 47% of respondents stated their organisations ability to deal with any potential risks were ‘not effective’ or ‘somewhat effective’. In terms of where the risks are mostly likely to be there was quite a clear split – 34% responding that they believed online purchases were the greatest risk, 25% arguing point-of-sale devices and 24% suggesting mobile payments were the biggest risk.
The survey also delved into who the respondents thought are responsible for payment security and the results were slightly limited. From those who took the survey, 45% believed banking institutions were responsible, credit card companies were chosen by 40% and 33% argued that the regulators should be held responsible. In comparison with the results for who should be responsible for protecting customer data following a breach, 75% believed the company who lost it should be held accountable and 69% for the bank who issued the cards affected.
Despite these apparent risks, money is still flowing into payment technology, though with caution. Almost 56% of payments players said that they predict their investments will increase over the next 18-24 months; only 12% expected a decrease.
In terms of development for the payment technology industry as a whole, there is a general consensus that greater collaboration is needed across the board. There are too many who could miss out due to each individual payments technology player concentrating on their own niche product within the industry. Moving forward there is a call for a decrease in middle men within the field to simplify the chain of global payments. Along with this, greater collaboration between companies is needed in order to iron out important issues such as security that could be a huge problem for future users.
About the Author: Harry Kempe, a marketing intern at IIR USA, who works on various aspects of the industry including social media, marketing analysis and media. He is a recent graduate of Newcastle University who previously worked for EMAP Ltd. and WGSN as a marketing assistant on events such as the World Architecture Festival, World Retail Congress and Global Fashion Awards. He can be reached at hkempe@IIRUSA.com
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