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Password inertia keeping consumers from easier payment authentication

Password inertia keeping consumers from easier payment authentication
 

Two separate reports have highlighted new trends regarding the adoption of novel payment authentication methods.

The first one, resulting from a collaboration between Pymnts and Entersekt, suggests a substantial divide between the authentication methods used by customers and the ones they would prefer to use.

For instance, 65.1 percent of those surveyed mentioned passwords as their primary authentication method, while only 46.5 percent said they used biometrics.

However, when asked about methods customers would have preferred to use during the same period, biometrics took the lead with 51.7 percent.

“As much as we hate it from a security perspective, people still find [passwords] pretty easy. They are fairly ubiquitous, and they don’t need any special technology,” says Mzukisi Rusi, Entersekt’s vice president of solutions, commenting on the report in a Pymnts interview.

Still, the research suggests that 52 percent of U.S. consumers experimented with at least one new payment method in 2022, including digital wallets.

This willingness, according to the Pymnts/Entersekt report, corresponds with an increasing number of financial institutions providing easy access to biometric and passwordless payment methods.

A Pymnts article describing the new findings mentions Banca Sella Group, which partnered with Idemia in November 2022 to create biometric payment cards and Fingerprint Cards, joining forces with card manufacturer Tag Systems, also last year, among providers expanding the use of biometric authentication.

NMI: convenience and speed drive payments innovations

A separate report by technology company NMI confirms the above findings, adding that speed (49 percent) and convenience (84 percent) are the driving forces behind customers adopting new payment methods, including biometrics and contactless.

Out of the 1,000 U.S. consumers NMI surveyed in October 2022, 69 percent said they made in-person purchases using contactless payments technology in the previous six months. 

More than half (54 percent) said they made a purchase using BNPL (buy now pay later), and 36 percent answered they had used biometric payment methods to make a purchase.

The NMI report also confirms the Pymnts/Entersekt findings that financial institutions are critical in fostering the adoption of new payment technologies. 

In fact, 46 percent of all respondents confirmed they discovered new payment technologies via their bank or financial institution, while 38 percent learned about them from their credit or debit card issuer.

“Consumers are eager to try payment innovations, but they’re also discerning. They look to trusted payment authorities — namely banks, financial institutions and card issuers — to lead the way in the integration of new payments tools,” reads the NMI report.

“These organizations hold the key to driving new technology adoption and influencing consumer payments sentiment. Consistently upleveling payment experiences with innovative technologies is also key to retaining customers — and goes a long way toward remaining competitive in a crowded payments marketplace.”

And while financial institutions work on marketing and educating customers about new payment methods, biometric providers are improving these technologies further to make them faster and more accurate.

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