Nuapay Points to Security Risks and Vulnerabilities Regarding Payment Cards

Nuapay claims it has uncovered apparent vulnerabilities surrounding payment cards, leading to a risk of fraud and “mounting consumer distrust.” The conclusion is being driven by an open banking report recently published where the firm says that more than one in ten (12%) of the UK consumers surveyed who have a debit or credit card claim to have had a payment made from their debit or credit card without their permission in the last 6 months alone.

The research was conducted by Censuswide, with 2,028 consumers in the UK surveyed in September.

Nuapay is an Open Banking firm and a provider of “Account-2-Account” payment solution that seeks to improve trust when making transactions.

According to Nuapay’s report:

  • 58% of consumers say that security is their biggest concern when making a payment online
  • 49% of consumers surveyed who have ever purchased goods and services online rarely or never agree to save their payment card details with retailers and stores for easier check out in the future when available.  Of those surveyed who have ever purchased goods and services online and don’t always agree to save their payment card details with retailers and stores, 57% cited security concerns as their reason for this, while 47% cited privacy concerns. Just under a third (32%) of these individuals cited trust of merchant concerned the merchant will make an unauthorised transaction as the reason for not always agreeing to save their payment card details.
  • More than a third (36%) of UK consumers have concerns about a specific online retailers’ security that it prevented them from purchasing goods or services from them.

When reviewing in-store transactions, consumers are less worried about fraud:

  • Consumers consistently prioritize ease of use, which over 2 in 5 (44%) said was the most important factor when choosing how to pay in-store. By comparison, only 37% cited security as the most important factor.
  • Of the customers surveyed who say they never use their smartphone to make contactless payments when in-store, over half of these respondents (54%) cited that this is due to security with regards to their phone.
  • 42% of those surveyed who have a credit or debit card are concerned about germs or viruses living on their credit/debit cards.

Nick Raper, Head of Nuapay UK, says that although the security risks of payment cards are not unknown, their research reveals the scale of the problem with card payments today.

“10% of Brits say they have had a payment made from their debit/credit card without their permission in the last six months – this is simply unacceptable,” said Raper. “Although it’s good that people are aware of the risk, this palpable lack of trust further demonstrates that card payments have their failings and consumers deserve better choice.  The days of people paying online with a 16-digit number embossed on a piece of plastic should now be dead as superior technology, that is both more secure and more convenient than cards, namely open banking, provides consumers an alternative.”

Nuapay adds that recent updates from Visa, Mastercard, and American Express to their 3D Secure (3DS) processes (Verified by Visa, Mastercard Secure Code and AmEx SafeKey respectively), which are additional security protocols intended to reduce fraudulent payments, the process is “long-winded and onerous.”

At the same time, the card schemes are imposing additional fees on acquirers and merchants to carry out the SCA authentication via 3DS, increasing the cost of processing cards for merchants.

Raper says that these plans that add cost to transactions to authenticate payments do not stack up.

” What’s more, when a payment can be made directly from one account to another via open banking payments, there is limited basis for payment cards to be used by merchants online.”

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