Payment security and data management are becoming increasingly interconnected as organizations respond to new privacy regulations, sophisticated cyber threats, and rising expectations for seamless customer experiences. As payments expand across digital and physical channels, businesses need stronger methods for authenticating customers while maintaining control over the growing volumes of data they collect. Technologies such as biometrics, smartphones, FIDO authentication, and machine learning could play increasingly important roles in creating secure, consistent payment experiences.
This article from PaymentsSource reiterates two of the multiple recommendations Mercator Advisory Group delivered last week in its 2020 Outlook webinar (available here): the need to improve how visitors and customers are authenticated and how we need to change the way we manage data.
Mercator argues that all participants in the payment ecosystem should move quickly to a converged authentication method used across all channels. Such a method should utilize smartphones, biometrics, and FIDO. We also identified that privacy regulations, ISO 20022, and machine learning require significant new investments in how data is managed:
Here’s more from the PaymentsSource article:
“Stricter data security and privacy regulations, emerging technologies, new customer engagement channels and higher-than-ever customer experience expectations are all placing tremendous pressure on organizations across all industries.
To help business leaders grasp the most significant trends affecting their organizations, here are four predictions for payments technology, cybersecurity and the regulatory landscape.
Businesses will need to meet the demands of the continuously evolving omnichannel customer.
Companies will increasingly invest in omnichannel payment technologies to keep pace with new policies like the California Consumer Privacy Act (CCPA), advanced hackers and the need to create a frictionless customer experience across every buying channel. In doing so, they will also continue to outsource operations to third-party service providers who must meet their convenience, compliance, security and data privacy needs seamlessly.
Improving payment security and data management requires organizations to rethink both customer authentication and the infrastructure used to manage sensitive information. As consumers interact with businesses across more channels, relying on separate authentication methods for each environment can create unnecessary complexity and potential security gaps.
A converged approach that incorporates smartphones, biometrics, and FIDO could provide stronger authentication while supporting the frictionless experiences customers increasingly expect. Applying consistent authentication standards across channels could also help businesses respond more effectively as fraud techniques and cybersecurity threats evolve.
At the same time, authentication represents only part of the challenge. Privacy regulations such as the CCPA place greater responsibility on organizations to understand how customer information is collected, stored, shared, and protected. Emerging standards such as ISO 20022 and greater use of machine learning add further demands to existing data infrastructure.
Third-party providers will also play an important role as businesses outsource portions of their payment operations. Organizations must ensure that these partners can support convenience and innovation without compromising compliance, security, or customer privacy.
Ultimately, payment security and data management must evolve together. Investments in modern authentication can help protect individual interactions, while stronger data practices can provide protection throughout the information lifecycle. Organizations that address both areas will be better positioned to meet regulatory requirements, respond to new threats, and deliver secure omnichannel payment experiences.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
