The 3 horror scenarios in online payments

Nicolas Fournié, Country Manager of the company for Spain and Portugal

Trick or Treating! Who has not chanted this motto on Halloween? Adults, don’t be nostalgic. The “seniors” can also get their dose of scares and cold sweats without necessarily having to wait for October 31… They just have to enter the most famous crime scene of all: the Internet.

Although the Internet is already part of the daily lives of billions of people, browsing is not always risk-free, especially when shopping online. There is a high risk of personal data being leaked. Hackers, viruses, the Dark Web (…), the very vocabulary of the Web is inspired by horror movies… and rightly so! We describe the 3 online payment scenarios that can go (very) wrong.

“The Panic Room”: Alert Undercover Burglars!

According to a PayPal report, 62% of the Spanish respondents acknowledge that they have abandoned a purchase on the Internet at some time, the main reasons for this being not being able to pay with their preferred payment method (30%) and concern about the security of the operation (31 %). In this sense, the security of the payment process is one of the main concerns of consumers. This is not due to chance: everyone has suffered or knows someone who has been the victim of an online scam. According to the French Observatory on the Security of Means of Payment, in 2020 almost 150 billion euros were paid online using a bank card. These operations are especially in the spotlight, since they represent 83% of the amounts defrauded.

When it comes to fraud techniques for online payments, the preferred method for hackers continues to be identity theft. It could cost $206 billion by 2025. Are netizens doomed to suffer from this cyber “chainsaw massacre”?

Since the rise of online shopping with the health crisis, the barricades to protect consumers have multiplied. For example, the Second Payments Directive (PSD2) and the Regulatory Technical Standards (RTS) were passed to protect consumers by introducing new payment authentication obligations. Currently, about a third of online card payments are subject to dual-identity authentication. However, in order not to threaten the level of sales of the marketplaces, they are interested in surrounding themselves with partners that can offer complete service capabilities to limit the commercial impact as much as possible without sacrificing the customer experience.

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«Saw»: a nightmare for the client

As a direct result of PSD2 and authentication measures, the penetration of mobile banking applications is increasing significantly. In fact, 72% of online shoppers have downloaded their bank’s app and almost all of them use it when authenticating to complete an online purchase. Although users are resistant, this new reality can go against the ideals of a quick and seamless purchase. Similarly, as consumers increasingly embrace innovative solutions like wallets and instant checkout, most businesses lag behind…

In this sense, the customer experience offered in a marketplace plays a determining role in the conversion rate. A nightmarish experience is a sure way to drive customers away. To convert visits into sales, marketplaces have to face the problem and invest primarily in the optimization of payment methods (on computers and smartphones). Sometimes all it takes is a little tweaking to make online shopping a real pleasure, guaranteed to be hassle-free.

“Halloween Kills”: The saga returns

Once an online order has been placed in the shopping cart and the checkout process has started, is that the end of the story? Suspense, suspense… No, the customer journey does not end there. If offering a smoother checkout experience is a true loyalty lever, offering multiple payment methods is essential, lest Michael Myers rise from the dead.

Very fashionable, there are more and more marketplaces that offer installment payment services to their customers. For many experts, such as our CEO at MANGOPAY, Romain Mazeries, payment in three installments without fees will grow strongly in the coming months, thanks to the boom in digitization. For consumers, this option has the advantage of avoiding being overdrawn or reaching the limit of the bank card.

However, beware of abuse. Legislating installment payments to better regulate them and limit any risk of over-indebtedness will be essential. In addition, marketplaces are interested in using partners capable of controlling and guaranteeing the solvency of consumers who want to pay in installments. Otherwise, be careful that “buy now, pay later” doesn’t turn into “pay never.”

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