When Securing Transactions, Global Experience Gets it Done
In today’s digital age, banking apps on mobile devices have become ubiquitous, offering convenience and ease of access to financial services. With more than half of Generation Z, Millennials, and Generation X favoring mobile banking apps, it’s evident that traditional brick-and-mortar banking is rapidly being replaced by digital solutions. However, as the adoption of mobile banking apps continues to soar, ensuring robust security while maintaining a seamless user experience has become of paramount concern for banks worldwide.
To address these challenges, banks are turning to advanced technologies such as FIDO (Fast Identity Online) and WebAuthn (Web Authentication) to revolutionize payment authorization processes. It’s crucial to understand how these technologies are implemented, especially considering the differing approaches between the United States and the European Union.
In the United States, the emphasis is on leveraging biometrics within banking apps to streamline payment authorization. Users can authenticate using biometric features such as fingerprint or facial recognition, eliminating the need for cumbersome password entry. However, for online payments, the reliance on risk analytics and SMS one-time passwords (OTPs) has resulted in high rates of card-not-present fraud and false declines. The use of SMS OTPs often leads to user friction and increased abandonment rates, as customers are required to switch contexts or even use a second device. To combat these challenges, Secure Payment Confirmation (SPC) has been introduced, built on top of FIDO/WebAuthn to provide a phishing-resistant credential for authorizing online transactions with a single gesture, be it biometric or PIN. This approach significantly improves conversion rates, reduces fraud, and minimizes false declines, ultimately enhancing both security and user experience.
On the other hand, in the European Union, banking apps also utilize biometrics for authentication, mitigating the need for password entry and enhancing security. However, the approach to online payment authorization differs, with push-to-app being the preferred method. Users are required to switch to their banking app to approve payment transactions, introducing friction and potentially increasing abandonment rates. Despite the use of biometrics within the banking app context, the past impracticality of biometrics in the context of merchant apps – especially web apps – has limited its widespread adoption. Additionally significant is that there is a lack of integrity protection for web apps – with this, implementing “what-you-see-is-what-you-sign” directly in web apps is not possible today. To address these challenges, Secure Payment Confirmation (SPC) is employed on top of and leveraging FIDO/WebAuthn to provide a phishing-resistant credential that is triggered by the merchant’s app or by the issuer’s access control server (ACS). This approach improves conversion rates by simplifying the payment authorization process while maintaining robust security measures.
In both regions, the adoption of FIDO/WebAuthn-based solutions marks a significant step forward in enhancing the security and usability of payment authorization triggered by web apps or by an ACS. By providing users with seamless and secure authentication methods, banks can instill trust and confidence while fostering greater adoption of digital banking services.
As the banking industry continues to evolve in the digital era, it’s clear that innovative technologies will play a crucial role in shaping the future of financial services. By prioritizing security and user experience, banks can position themselves as leaders in the digital transformation of banking, driving greater customer satisfaction and loyalty in an increasingly competitive landscape.
When banks need to implement Secure Payment Confirmation (SPC) requirements, partnering with trusted FIDO vendors like Nok Nok who have experience in both US and EU payment security can ensure the successful implementation of this technology. Nok Nok’s ability to demonstrate a large user base employing various authentication protocols to produce cryptographic evidence further solidifies its position as a reliable partner in enhancing the usability for secure online payments.
