Deep Dive: The Consumer Trust Deficit And How Robust Login And Payment Security Can Help Build Trust

The pandemic prompted an unprecedented 44 percent year-over-year jump in online spending with U.S. merchants in 2020, according to one report, and similar trends occurred worldwide. As a result, it has become more crucial for retailers to secure customers’ sensitive data. Consumers are growing more demanding about security concerns as they increase online shopping and digital consumption, and they are rewarding the merchants who stay ahead of the curve in protecting them.

The following Deep Dive examines why consumer trust is so valuable to retailers and how consumers prioritize security above all other concerns, including convenience and, much of the time, privacy. It also analyzes how businesses can strengthen consumer trust and long-term loyalty through more robust ID verification and transaction authentication procedures.

The Importance Of Consumer Trust

Numerous studies show just how critical it is for companies to develop strong consumer trust — as well as the costs of failing to do so. One survey found that high levels of trust enhance brand preference by 40 percent and brand loyalty by 18 percent, while nearly nine in 10 consumers will stop engaging with a brand that loses their trust. Recent PYMNTS research reveals that trust in a merchant ranks far above variables such as user-friendly websites and personal recommendations as the top determinant of a consumer’s choice of retailer. The report also shows that easy-to-implement changes can modestly boost a retailer’s appeal: 17 percent of first-time shoppers with small businesses cited product ratings as the most important reason for choosing a merchant, for example, while 10 percent cited the presence of security certification logos.

There is a general lack of consumer trust in the market, however, especially when it comes to transactions with online businesses. Just 45 percent of consumers in the same PYMNTS report cited trust in familiar merchants as their reason for lacking interest in additional data protection measures. New large merchants and new small ones command even less trust, at 43 percent and 33 percent, respectively. Respondents with incomes above $100,000 per year exhibited a higher level of trust for new large merchants, nevertheless, at 52 percent. Consumers want not only greater security but also visibility into how their data is being used. Another recent survey found that 82 percent of consumers want greater transparency into the data being collected on them, while 59 percent believe it is worth offering up access to their data if doing so means improving the user experience.

Consumers Place Security Over Convenience And Privacy

Consumers place far more value on the safety of their data than on easy payment and login processes, in fact. PYMNTS’ research found that the majority of adult consumers in every age group want merchants to “do whatever it takes to protect data” rather than “keep payment processes fast and painless,” led by baby boomers and seniors when shopping with familiar merchants: An 87 percent share held this belief. Respondents’ insistence on security at all costs was more prevalent in first-time transactions with new small merchants than with new large ones, however, at 84 percent and 75 percent, respectively.

Security trumps not only convenience at checkout but also other areas of the consumer experience — even privacy. One survey reports that 85 percent of U.S. consumers prefer a known merchant with longer delivery times or even higher costs over an unfamiliar one, and 68 percent want retailers to take extra steps to confirm their identity, such as two-factor authentication, even though these can add friction. Most of the respondents also prioritize security over privacy — 56 percent are willing to let merchants track their transactions and profiles daily, and 72 percent want them to monitor unusual behavior.

The question of security versus privacy is complex, however, and companies must know their customers’ preferences and tailor their security and data collection strategies appropriately. A recent U.K. poll found that almost one-quarter of consumers say they use only guest checkouts for online purchases to protect their privacy, and over one-third want to control the personal data that companies have collected about them. Demand for payment technologies that protect user identity is thus likely to grow among a sizable portion of consumers going forward.

Winning Trust With Login And Payment Security

When it comes to keeping consumers secure, usernames and passwords have proven both ineffective and cumbersome. The intensifying consumer focus on security means that companies should improve their efforts to provide safer and more confidence-inspiring login and payment experiences. One of the most impactful actions businesses can take is to offer more robust login and payment authentication solutions. These biometric factors include fingerprint scanners and facial recognition; MFA, which involves confirmation on two (or more) connected devices; and single sign-on, which centralizes authentication in a trusted application, such as a ubiquitous company’s ecosystem.

The above-mentioned research found that biometrics and PIN code-based MFA command the trust of the largest shares of consumers, at 74 percent and 72 percent, respectively. Another survey found that 49 percent of consumers prefer services that offer MFA, closely followed by single sign-on at 47 percent and biometrics at 46 percent. Merchants that offer smooth, cutting-edge ID verification methods that consumers prefer thus have a better chance at gaining their trust and building lasting relationships.