Report: U.S. E-Com Merchants Lag World in Consumer Authentication Use

May 8, 2014

Report: U.S. E-Com Merchants Lag World in Consumer Authentication Use Only half of e-commerce merchants are using some sort of consumer authentication program, according to the results of a new study from card-not-present authentication technology provider CardinalCommerce and payments consultancy The Fraud Practice. Of the nearly 180 merchants polled in Use of Consumer Authentication in eCommerce , the 50 percent using consumer authentication lean heavily on one of the major 3D Secure programs—Verified by Visa or MasterCard Secure Code. Eighty percent of the merchants who use consumer authentication rely on those, while 31 percent use device verification. North American merchants lag behind those from the rest of the world, with only 45 percent enrolled in at least one consumer authentication program, while 60 percent of e-commerce merchants outside the U.S. and Canada utilize some sort of consumer authentication.

The main reasons reported by merchants not using consumer authentication are not surprising: 20 percent fear it will negatively affect sales conversion, 13 percent think it will change the user experience and 13 percent say they lack the time it would take to implement.

The study also took a look at the type of merchants using consumer authentication programs and found those in high-risk businesses or that sold higher priced goods were more likely to use the programs.

“With EMV coming into the U.S. market, fraud is more likely to move to the online sales channel with the roll out of chip cards,” said David Montague, president of The Fraud Practice. “The need to understand the value and set expectations for implementing Consumer Authentication has never been more timely.”