When it comes to using credit cards, most of us pay with them so frequently that we rarely leave home with another form of payment. Yet within this increasingly wide-spread adoption there is an elevated concern over security. And with good reason. From the 2013 breaches at Target and Home Depot to the most recent catastrophic security failure at Equifax, consumers overall are justifiably concerned about who should be given access to their payment and personal information. Some 42% of Americans report having personally experienced credit card fraud, with about half of those reporting multiple occurrences. When it comes to shopping online vs. in-store, most consumers feel more apprehensive about ordering online as opposed to swiping their card in person. But the reality is far more complicated.
Brick-and-Mortar Problems
The assumption that paying in-person is safer is largely the result of it being the more familiar option. People have paid in-store in some capacity for centuries, and in-store with cards for decades. However, this concept that brick-and-mortar’s long-standing history equals security is a problematic assumption.
The most frequently cited proof of this in recent history are the breaches around the holiday season in 2013. Target reported 70 million clients had their personal information hacked and Home Depot reported 54 million credit cards were compromised. In response, the shift towards EMV chip cards was supposed to better secure consumer data, but this shift still comes with a multitude of problems. Most stores utilize old PCs and run point-of-sale software that stores data in an insecure manner. Many stores continue to use outdated devices that are not EMV-Chip capable, despite EMV-Cards being the required standard for payment security since October 1, 2015.
Going card-less comes with risks as well. ATM Skimmers are widely used to steal consumer data. Skimmer devices are installed on ATM keypads and enable hackers to steal consumer data via your magnetic strip and your PIN number directly from the keypad. Short of going into the bank to make a cash withdraw every time you wish to make a purchase, all methods of card usage come with risk. So is in-person really the safer bet?
Online Angst
In the earliest days of online shopping, consumers were right to have reservations about security. The underwhelming measures taken early-on were obvious, and this has led to a long-standing fear of online ordering. Security remains the top reason given as to why consumers don’t shop online. Kaspersky Lab reports that 49% of people surveyed worldwide cited feeling vulnerable when online shopping and 62% reported a fear of financial fraud online. This anxiety also appears to increase along with the size of the purchase being made.
When asked about the importance of extra security measures when ordering online for a purchase of $100, 85% of people agreed that security was more important than convenience. However, this same study found that in the case of a $5 online purchase, only 70% valued security more than convenience, with 30% responding that the transaction being fast was the most important aspect of the experience.
Which leads us to the question: can you have both security and convenience? As we’ve discussed before, convenience is a crucial aspect of the payment process in today’s market. But does this need for speed come at the cost of consumers’ data safety?
Best of Both Worlds
The reality is that in today’s payments landscape, online payments have become the far-superior option when it comes to security. As a rule, larger retailers don’t make the same level of commitment to security that online retailers do. Any reputable online retailer protects customers with SSL certificates, firewalls, regular system scans, etc. PayPal uses a security key which provides a second authentication factor when logging into your account.
Perhaps the clearest example of online security outpacing brick-and-mortar comes in the form of tokenization. Retailers that offer one-click purchasing, like Amazon or PayPal Express, are able to do so via tokenization. This method works by creating a token for customers, so that when you place your order your token, rather than personal information itself, is retrieved. This means faster and more convenient payments with the highest security since your data isn’t actually entered on the device; instead it’s part of a secure transaction with banking-level encryption.
Convenient Security
The reality is that no payment method is 100% hack-proof. However, the odds are overwhelmingly in favor of online payments in today’s market. Finding technology both online and in-stores to provide fast, convenient, safe and secure payment processing is not something to be taken lightly. Processing payments is only as good as the technology and security it’s backed by. Which is where we come in! Pineapple has industry-leading solutions to both online and in-store processing that protect businesses and customers alike. That banking-level encryption we mentioned? We have that too. Our patented tokenization protects your customers and your business from breach. Contact us today to find out how Pineapple enables you to have both convenience and security in all aspects of processing.