Businesses Prepare to Meet Security Requirements

The adoption of digital transactions has exploded since the start of the pandemic, alongside a commensurate decrease in the use of cash, which has caused many people to reflect on the future fate of fiat money.

“We were all in digital growth, we just had an event that accelerated this to the next level – and at this point it seems like there is no going back,” said Leslie Bailey, Vice President of Market Planning at LexisNexis Risk Solutions. PYMNTES.

It remains to be seen if or when we will actually become a so-called ‘cashless society’, she said, but countries like Sweden have followed this trend and it has worked well, while a whole generation of natives digital is quite comfortable going cashless – and in fact, prefer it.

“But I think it will take a little while for a whole society to evolve trusting that digital transactions, or something that would replace cash, are okay,” Bailey said.

Facilitate transactions transparently and quickly

The foundation for the digital transition is already there, laid by PayPal, Apple Pay and other disruptors. With the tools created by these providers, consumers have become accustomed to the convenience of making simple, frictionless payments with their cell phones.

“I think all of these little changes that we’ve seen over time have allowed these companies and quite frankly a generation of people who have gotten to digital to be able to transition quickly,” Bailey said.

This move to the next phase of global payments comes with a significant risk of fraud. At the same time, however, businesses need to provide customers with the payment mechanism they want.

“Our ability to provide simplicity – and part of that is risk mitigation – and our ability to facilitate transactions seamlessly and quickly are critical for businesses going forward,” Bailey said. “Businesses need to prepare; customers expect them to engage in trusted transactions.

Being a pioneer helps

She suggested that companies be informed, examine trends, prepare for changes in legislation and improve their technology, adding that companies that invested in technology early have had fewer cases of fraud.

When it comes to trends, changes often start elsewhere before finally landing in the United States. As an example, Bailey highlighted what Europe has done in recent years in terms of open banking or more traditional platforms to accommodate payments.

“It’s all moving outward, so I think looking at these trends and your options to be a trailblazer certainly helps businesses at all levels,” she said. “Anytime you step away from the traditional, you have a huge responsibility to build the trust that leads to change.”

Towards a cashless society

Any change to a cashless society will take time, but the potential is there. Bailey noted that it has taken 20 years for financial institutions to stop asking what customers want as their first question when opening a new account. So, assuming the rate of change moves faster than that, it could take 10 years.

“It’s definitely a step in that direction,” Bailey concluded. “It’s just easy. It’s easy to pay with your phone, it’s easy to Venmo someone or use Apple Pay – people have it on their watches and they love the speed.

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NEW PYMNTS DATA: 2021 HOLIDAY SHOPPING PERSPECTIVES

On: It’s almost time for the holiday shopping season, and nearly 90% of US consumers plan to do at least some of their purchases online, 13% more than in 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed over 3,600 consumers to find out more about what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.

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