"Cybercrime is easy to fight" and other payments misconceptions
Making payments is easy. Making payments easy is hard.
The experience of making a digital payment has come a long way since the days of card imprinters and carbon paper. Today, it’s so easy and natural that most people barely notice it. It’s a tap at the checkout or token-autofilled credentials at an e-storefront. For merchants and consumers, it’s seamless, painless, frictionless.
The perception that follows, though, is that the work of making payments seamless and painless and frictionless for merchants and consumers is similarly easy. The truth is: it’s not. It’s hard and expensive and takes a veritable army of experts to make it happen. There’s a real disconnect between perception and reality.
To get to the core of the disconnect, we are constantly doing research throughout the payments ecosystem. Twice a year, we conduct our own Biannual Threats Report, and this year, we also partnered with MIT Technology Review Insights on Moving Money in a Digital World, a survey that digs into the critical role security plays in expanding “easy,” digital-first payments. Between the two, what we found is this: the pandemic expanded digital money movement, but payment fraud — in the form of digital skimming, phishing and attacks on business misconfigurations, to name a few common vectors — expanded right alongside it.
The rise of digital payments means more money is passing not through hands but through APIs and internet connections — the hunting grounds for cyber criminals. The more this becomes the case, the more important it is to separate fact from fiction. Here are three common misconceptions that keep businesses of all sizes from seeing the full picture.
Misconception 1: Digital payments are optional
Today, consumers, small businesses, larger enterprises and governments all expect to be able to move money seamlessly — both domestically and cross-border. And post-pandemic, the majority of consumers say the way they pay has changed forever.
This reality is reflected in survey results, with MIT finding high interest in digital payment technologies across businesses of all kinds. Over the next 18 months, 43 percent expect to expand their offerings, with many venturing into cross-border transactions (37%) and cryptocurrency (18%). Why? According to 70% of respondents: to improve customer experience. More and more, accepting digital payments is table stakes for economic participation.
Misconception 2: Digital payments are expensive
42 percent of respondents in the MIT Tech Insights research cited processing costs as a concern. But the fact of the matter is that accepting digital payments may actually be less expensive than accepting cash.
With cash or checks, businesses endure costs associated with processing, securing, managing and transporting physical money, as well as losses from employee theft, inaccurate cash handling and check fraud — not to mention additional expenses associated with loss-prevention services. Add it all up, and digital payments often come out cheaper. And with digital payments, verification is built into the transactions rather than being a separate step.
Misconception 3: Fighting cybercrime is easy
MIT Tech Insights found cybersecurity threats to be the biggest challenge for respondents expanding to digital payments (59%). And with 42 percent saying security measures are important to their customers, adopting more advanced security capabilities including enhanced authorization technology like tokens (32%) and fraud detection through biometric authentication and AI (43%) is a priority for many.
But fighting cybercrime is expensive, time- and labor-intensive work. Over the past five years, Visa has spent more than $10B in technology, including to reduce fraud and increase network security. And we have more than a thousand dedicated specialists monitoring payments activity 24/7/365. In the last year alone, we have proactively blocked $7.2 billion in attempted fraudulent payments across 122 million transactions — before those transactions impacted clients. Staying ahead of bad guys is far from easy, particularly when their tools of choice change all the time. Keeping payments easy for consumers and merchants requires us to sustain a high level of investment — in dollars, brain power and technology.
The reality: Making payments easy is hard
As more and more of our financial lives exist in the digital realm, security only grows in importance. But security isn’t just a box to tick. It’s hugely expensive, takes lots of brilliant people, and requires the constant development of innovative defensive and offensive capabilities to ensure customer data is stays secure — and payments are seamless, painless and frictionless — no matter where or when a transaction takes place.
Want to read more on security and payments? Check out Visa’s Biannual Threats Report and Moving Money in a Digital World.