Stripe Acquires Touchtech(techcrunch.com) |
Stripe Acquires Touchtech(techcrunch.com) |
My main bank account is with Nordea, a big Nordic bank, one of Sweden's big four. They are currently quite paranoid about Internet purchases and outright do not permit any such transaction if it does not have that kind of two-factor authentication — if the merchant doesn't support it, you must log in with the app or Internet bank and temporarily turn this off for one hour. But with support for two-factor authentication bexoming obligatory in the EEA, I guess it will only be non-EEA merchants where this is a problem. :)
I guess I'll move to Stripe checkout instead of my custom form.
For e-commerce platforms, refunding fraudulent charges is cheaper than a two-digit drop in transactions.
I'm wondering what this means for multi-factor authentication with regards to payments. Why bio-metrics instead of a physical security key and U2F? Convenience? Customer reach?
If the U.S. implements something like SCA in the future, would it be likely that biometrics will win out over PINs or security keys, given different legal protections for both (https://pilotonline.com/news/local/crime/article_25373eb2-d7...)? What might this mean for future legal precedents regarding biometrics?
eBooks save money on printing and distribution but often aren't any less expensive than printed books.
eTickets save money on processing but ticket platforms charge a "convenience fee" on top of the ticket price.
When oil/fuel is at record lows, do airlines lower ticket prices in line? No.
Here's an example from finance: when banks save money via online banking and more advanced ATMs (allowing them to employ less people), do they lower their fees? No. https://www.latimes.com/business/lazarus/la-fi-lazarus-price...
Here payment card fees are also far far lower because we don't have a credit card mentality of always seeking that tiny percent cashback, so these are much rarer in Europe. We also have banks themselves competing with Visa and MasterCard, for example in Belgium with bancontact. The banks offer merchants even lower fees for these.
So yes in some worlds the fees are passed down to the consumers. In other worlds, you have the United States.
I highly doubt that 25% is anywhere close to the long-term impact, but any fraud detection that increases friction decreases the number of impulse purchases. If it's not clear that reduced fraud creates a bigger benefit than lost purchases the industry won't implement it. Add the sometimes weird incentives (chargeback fees etc) and something that's beneficial to the consumer might never be implemented willingly by payment providers.
If the friction from better fraud detection reduces impulse purchases it might be detrimental
note that profit (without qualifiers) == net income (as opposed to gross profit or operating profit)
so it's not true that no money is available for further improvement. profit is what's left over after re-investment (and other costs).
it's also not strictly true that it doesn't inventivize hard work. if the owners take money out of the company as salary and benefits, or they derive satisfaction from the quality of their work and/or pride in building an organization, they may be very well incentivized.
to actually answer the original question, you'd need to understand how value gets distributed in a value chain (including customers). it depends on the relative power of the various actors in the chain. if customers have a lot of power, they'll extract most of the value of the value chain (likely in the form of lower prices). if suppliers have the most power, they'll retain most of the excess value in the value chain as profit. based on a quick read in this case, the supplier has lots of power, so stripe will likely retain most of the profits.
For example 3DSecure mechanism redirects customer to another site where user has to put a number received in a text message. My phone is in another room upstairs. I cancel the payment and tell myself I'll do it later. Of course I might do it, but I might forget about it or change my mind.
Another example: (in Europe) from time to time, when making a transfer/payment, I have to generate an OTP using a physical device that I received from my bank. I find it extremely irritating, and I don't take this device with me everywhere, so if I'm making a payment and I'm expected to use this device, I cancel the payment.
I've worked in a place where we introduced 3DSecure mechanism for our payments, and in certain countries it dropped conversion rate while in others (where people are used to such mechanisms) it remained the same
I'd guess that market competition would drive up rewards as new entrants pass back more of the savings to consumers.
But I don't think I've ever seen them used on foreign stores.
Also: Local merchants here tend to use local payment service providers instead of Stripe etc. as the merchants need support for local payment methods, like "bank buttons" which have traditionally been the most common payment method (and much cheaper to merchant than cards).
It kind of stinks being a vendor. Stripe charges extra for certain security pre-cautions but it doesn't do a great job at protecting against fraud on its own, where as 3dsecure does do a great job but it kills conversion rates since it's something a consumer will see.
In the end, it's the seller that ends up having to pay the price. Either through fees for disputes (which are very expensive, it's $15 per dispute) or having to pay for extra passive services, or lowering conversion rates with 3dsecure or requesting a ton of info to help reduce fraud (full address, etc.) for a digital product that won't be shipped anywhere. That raises suspicion from the consumer and it's a lot more fields to fill out -- plus it's not a sure fire way to prevent fraud.