Why a little bit of friction is no bad thing

In a video for Fintech Finance, David Poole, our Director of Business Development, spoke about our work with Worldpay in demoing the MYPINPAD solution.

One critical topic he discussed was that of security and giving consumers control over their transactions. This is an area we have been vocal on and with good reason.

Earlier this year, we published widely reported results of a consumer survey we carried out to explore consumer attitudes towards the PIN.

One of the most telling findings was that 85% of those we spoke to would like the opportunity to be notified on their mobile of high value transactions and then authorise them, again, on their mobile.

 

The reason this is particularly interesting is that, as an industry, we often promote “frictionless” payments and transactions. One touch, quick verification, unobtrusive security and the transaction is completed.

We promote this concept because we believe it is something that consumers want in all aspects of their digital lives. But do they want it when it comes to managing their financial security?

Looking again at our own research from last year, the answer is clearly “no.”

We specifically asked consumers about high value transactions and the resounding response to this questions demonstrates that there are circumstances where they want the chance to review transactions before they are authorised.

Every one of us has a “think twice” price; a point at which we stop and think about whether we might want to have another think about the cost or value of any given transaction.

It will depend on what we are paying for, our status, our attitudes towards money and shopping and a whole host of other variables.

Yet, fundamentally, each and every one of us has our friction moment. And this is something that should be recognised by payment systems and authentication systems.

The functionality available to banking and payment apps is such that users could and, indeed, should be given the power to set their own think twice price. When that individual limit is hit, then simple authentication via PIN would give the ability to authorise the payment or decide against it.

Indeed, this is something central to the Payment Services Forum’s consultation paper; Being responsive to customer needs: A draft strategy for consultation published last week.

In particular, the paper proposes a solution called Request to Pay, stating: Request to Pay is a new payment instrument that would enable businesses and consumers to create and send payment requests. Recipients of these requests could decide if, how and when they want to respond with a payment. This solution will provide consumers and businesses, including the charity and voluntary sectors, with more control over the timing of their payments and would deliver increased choice.

It is clear that the industry is increasingly coming round to the idea that friction in payments can be welcome under certain circumstances. It is a concept that MYPINPAD not only welcomes, but is ideally placed to help manage in a simple and trusted fashion.