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CHARACTERISTICS OF A SUCCESSFUL PAYMENT METHOD: USER EXPERIENCE
User Experience Payment methods need to be as seamless as possible for end users (i.e., consumers), so commerce can be as slick as possible. To an extent, the fierce competition between merchants ensures user experience is a
front-and-center consideration, but this can come at the expense of security. iii There are several nuances to consider when it comes to user experience, including: 1. Authentication
Merchants need to make important decisions over which authentication or presentation method to use, and a good payment method will have lots of options available for different use cases. In the card market for example, authentication methods available include contactless, PIN entry, 3D Secure and even biometrics. iv Average transaction values and industry differences will dictate the importance of speed. For example, for a Quick Service Restaurant (QSR) speed is paramount; for an electronics or furniture retailer with an average transaction value of $1,000 or above, then security is a lot more important than speed. This is a particularly important consideration given the EU’s PSD2 Secure Customer Authentication (SCA) two-factor authentication mandate including Transaction Risk Analysis fraud volume thresholds as well as the 3D Secure mandate in Japan that went into effect April 2025. 45, 46 2. Omnichannel The COVID-19 pandemic brought an increase in multi-channel commerce, as we saw a rapid increase in Buy Online Pickup In-Store (BOPIS), or curbside pickup, in many countries. If a merchant successfully achieves an omnichannel experience, there are marketing benefits for merchants which allows them to interact with consumers in new ways. For example, consumer rewards can be used across channels, and baskets can be stored to reduce abandonment rates. However, there may be trade-offs against cost. 3. Payment Method Choice The most basic demand of any consumer will be that they want to be able to pay for goods and services. Most people have had detrimental consumer experiences where they’ve not been able to complete a transaction because the merchant did not accept any of their available payment methods, or their selected payment method was declined. To optimize user experience, merchants need to ensure consumers’ payment method of choice are widely accepted. This essentially creates a chicken-or-egg dilemma, whereby merchants don’t accept payment methods until consumers demand it, and vice versa. Disparate payment types may access the same underlying funds which may drive consumer indifference (See Acceptance)
iii The decline and bankruptcy of major retail chains combined with razor thin retail profit margins demon-strates the high level of competition in the industry. iv Note that biometric authentication of card transactions is more likely to be used to authenticate devices such as phones that store payment card credentials, and not necessarily the payment product itself.
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