Oscar Nieboer – CMO, Paysafe Group
Security has overtaken reliability and cost as the top priority for businesses when selecting a PSP. Here’s why.
There is a genuine belief globally that online goliaths such as Amazon, with the financial and human resources at their disposal to be at the cutting edge of all and any industry it chooses, have their eyes fixed on running every small competitor out of business; the online businesses that cannot keep pace with the latest innovations in customer experience will fall away as their market consolidates.
To discover how businesses are reacting to this threat, we asked over 600 SMBs from across Europe and North America accepting payments online to tell us how they are planning to futureproof their businesses in the face of a rapidly changing ecosystem and with eCommerce powerhouses looming over their shoulders.
Choice is fundamental at the checkout of tomorrow
One major takeaway from our Lost in Transaction: The future of payments for SMBs research is that online businesses are committed to giving consumers more flexibility when it comes to the method for making a payment.
According to our survey, 75% of online businesses agree that increasing the number of payment methods they offer at the checkout is essential to success. This is a recognition that the payments ecosystem is fragmenting, with consumer payment preferences dissipating beyond traditional card payments to numerous alternative payment solutions.
Online businesses currently offer four payment methods on average, but this is predicted to rise to six within two years. The alternative payment methods we expect to feature more regularly at the checkout after this time include online cash replacement systems, payments by instalment, and subscription payments.
In the era of seamless payments, security trumps everything else
Online businesses are aware of the pressure to create a seamless payments experience, but over half (52%) of them also believe that reducing friction in the payments process exposes them to a greater risk of facilitating fraud. 74% believe fraudsters are targeting online businesses more than they were this time last year in any case, and 55% acknowledge that online card fraud is an increasing problem for them.
So it’s not surprising that security is now the primary factor online SMBs take into consider when selecting which payment service providers (PSPs) to partner with. 59% of businesses list security as a key consideration, ahead of reliability (49%) and cost (47%).
This is a direct response to the need to implement friction free payments in a secure way to remain competitive; 81% of businesses place the responsibility for protecting against fraud at the door of their PSP and 70% acknowledge they are finding it hard to determine the balance between improving security processes whilst making the customer journey as seamless as possible. Overcoming this hurdle is the critical step to futureproofing for an online merchant, which is why it is such a critical consideration factor when selecting a payments partner.