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Why Consumers Are Less-Than-Secure Over Payments Security

How secure do you feel when it comes to payments?

Perception is not always reality, but it does matter. Consider a survey commissioned by payment, telecom and financial data solutions provider Transaction Network Services (TNS), which found that 85 percent of adults across the United States, the United Kingdom and Australia believe fraud attempts on debit and credit cards are on the upswing.

Two-thirds of the more than 3,000 adults surveyed said they were concerned about data security, with 38 percent of respondents believing their private information may have already been exposed. Age plays a factor in these beliefs, too: More than 70 percent of those over the age of 45 reported concerns about data security versus 59 percent of those aged 18 to 24.

In an interview with PYMNTS’ Karen Webster, Transaction Network Services’ Chief Security Officer, Kent Kling, noted that consumers have an expectation that their credit and debit card data will be kept safe, regardless of who it is given to or where it is given, whether in-store or online.

Consumers are becoming more tech-savvy and increasingly familiar with a continuum of payment methods. According to Kent Kling, firms have a responsibility to keep data safe along each transaction’s journey, with security controls in place and the understanding that those controls must be strengthened year over year. After all, hackers are rather savvy, too.

The older demographic uses credit cards for purchases more often than younger consumers. The younger bracket, Kling said, will also occasionally use Venmo or other mobile payment apps to send money to one another.

“They are doing it very frequently and are not putting much thought into it,” Kling said.

But, conversely, the older generation goes out to Costco and puts a few hundred dollars on a credit or debit card — an entire paycheck for youngsters who may be at the beginning of their careers, and thus will be less likely to load up their cards with balances.

The in-store results of the TNS survey show less trust in in-person transactions. Kling noted that though in-store data breaches may be somewhat fewer in number compared to those that occur online, they may get a bit more play in the press. The names are more commonplace, too, with headliners like Home Depot or Target.

According to Webster, the younger generation is more suspicious of in-store security than their elders above age 55. But the fact remains that more 18- to 25-year-olds are not going into stores to make purchases, said Kling, and are instead looking to online shopping from the likes of Amazon. As such, he stated, their opinion of brick-and-mortar transactions and attendant security remains skewed.

As for blaming the retailer for any number of breaches? “We do have short memories,” said Kling, and the hunger always returns to conduct commerce — so all is eventually forgiven.

Nonetheless, he continued, there must be accountability all the way from the consumer to the acquiring banks. Information flow helps cement accountability, with offerings such as text alerts of card activity and two-factor authorization to enhance data encryption and prevent credit card fraud, Kling noted.

Webster questioned what practices or policies would help consumers feel a bit more secure. To assume they understand the intricacies of data encryption, which more than 70 percent of respondents cited as a secure way to protect transactions, would be a bit of a stretch.

“They might understand it at a very high level, but [encryption] is another buzzword … [consumers] understand that encryption will [not] devalue their data, but give it a safe passageway from the point of the transaction all the way to their bank,” said Kling. As long as consumers are not inconvenienced, he added, all is well.

Yet, against all the expectations surrounding safety and data flow, Webster cited a Verizon study that found half of companies do not protect payment data from breaches.

“Security is making its way to the boardroom,” Kling countered. TNS, for its part, is seeing an increasing number of security addendums attached to client contracts, stretching beyond mere compliance mandates, such as PCI.

Touching on accountability, and moving beyond banks and merchants, Kling noted consumers must gain awareness of where they are spending money, especially since the days of balancing checkbooks seem to be bygone.

“From an American standpoint, we are in debt … there are too many ways of putting things on credit cards,” Kling said.

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The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

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