Trust Lies at the Heart of Secure and Seamless Payments

Today’s hyperconnected world has come a long way from its beginnings just over 30 years ago. Yet the first digital purchase—the sale of an album by world-renowned singer Sting in the US—laid the groundwork for the future we now inhabit. At the heart of this $12.48 transaction between two college friends was the key ingredient to all payments: trust.

Three decades later, we are immersed in a digital universe. The experiment between students in Philadelphia presaged the explosion in online consumer payments, worth almost $9 trillion today.

Yes, digital payments have expanded choice, so you can pay for goods from across the road the same way that you pay for items from across the world. But in this technological revolution, the stakes for retailers and businesses to build trust with their customers have never been higher. Studies show that over half of us would stop buying from a brand if we felt our trust was breached.

Unlock trust with convenience

As hyperconnectivity powers faster, more frequent payments, maintaining trust is by no means easy. As cybercriminals become more sophisticated, they continue to try new ways to disrupt the cycle of trust between business and customer.

Whether it’s fraud, or simply a case of a business failing to fulfill what a customer has paid for, paying with Mastercard offers valuable protection. Our holistic approach to security gives cardholders a way to get their money back via their bank.

However, there are occasions when legitimate payments can be misidentified as fraud— putting pressure on businesses that then need to refund them. A list of unfamiliar names or references next to outgoing payments on bank statements can lead to a consumer mistakenly requesting their money back from their bank. These sorts of chargeback requests are expected to cost issuers and merchants $1 billion this year.

To find a solution, we must make transaction information clearer for everyone. Recent data shows that nearly all consumers want their bank to increase clarity by providing more transaction detail. This can be as simple as adding a logo or digital receipts to each outgoing payment, and it will go a long way to reinforcing trust.

Businesses want these insights, too. One luxury fashion brand avoided 12,000 disputes in just 12 months by using our automated alerts to detect irregular or suspicious payments, preventing $7.5 million in fraud.

Reinforce trust through identity

All of this highlights how much has changed. Knowing who was on the other side of a transaction was straightforward in 1994—when the digital payment ecosystem consisted of two friends in the same city. However, with over two–thirds of adults worldwide now making payments digitally, how do we know when to trust the entity at the other end of the transaction?

To date, the solution has been a variety of verification measures, such as clicking images of traffic lights or inputting a code sent to your phone to prove your genuine identity. While these innovations protect billions of digital interactions, their benefits can often be undermined by the time they take to complete.

So, we must focus on removing the tension between security and convenience. Our solutions reassure all parties that the consumer making a payment is who they say they are. We combine real-time data with key identity markers to identify risky transactions or account openings before they happen. This approach safeguards consumers and merchants against fraudulent transactions, and has helped stop $35 billion of fraud in the past three years alone.

Advance trust with biometrics

So, where do we go from here? Use of biometric technology—from the way we open our phone to how we pay—has the potential to fundamentally change the way we live for the better (and three-quarters of consumers agree). Biometrics are also changing in-store retail, enabling shoppers to pay with a smile or a wave. This is what’s possible today; it’s incredible to think about what’s in store tomorrow.

Looking forward

As we enter this next frontier of payments, we must continue to always put trust first. The CD sale in 1994 was only possible thanks to the collaboration of two people who knew each other well. Our industry then followed suit, working together to turn that spark into the global proliferation of today’s digital economy.

We can only predict the next stages on this journey. As it charts its course, we will be led by a relentless desire to achieve a lasting, positive, secure experience. By advancing trust, we will welcome more shops, businesses and consumers as we accelerate together toward a future that is truly transformational.

By Ajay Bhalla, President, Cyber & Intelligence, Mastercard