According to Forex, the UK is currently the third most cashless society in the world, pipped to the post by Canada and Sweden, which were found to be ahead of the trend in ditching cash.
However, new technologies in biometrics, wearables, QR codes and NFC combined with massive investments in mobile broadband and smartphone technologies, means that cards are becoming obsolete.
As Sam Shrauger, Head of Digital Products at Visa, says:
“There’s an evolution toward more and more card-free forms of payment. Even if you look at the growth rate of e-commerce, it’s all card-based but not with actual cards, and that’s growing much faster than the rate of retail where people may be actually swiping
or dipping a card.”
When a bellwether brand like Visa is predicting a card-less future, you stand up and take note.
The benefits of a card-less society are self-evident. Consumers like the convenience of card-not-present transactions and the expediency and instant gratification of omnichannel shopping options. Trust is a huge part of the game with new subscription-based
business models, and mobile-enabled services storing bank details, and taking money whenever without a request or receipt.
The points at which consumers can initiate a transaction are changing, too. Even your fridge can place an order, which may cause a rise in friendly fraud, whereby a consumer disputes a charge because they’re not familiar with the transaction that has appeared
on their bank statement.
Previously, it was best practice for any merchant who accepts card-not-present transactions via the telephone or by mail-order to make sure their contact telephone number or postal address appeared on the statement to avoid any confusion. Likewise, if processing
payments through the Internet, the website address shows in the billing descriptor – the text that appears on a consumer’s card statement. Just as new payment methods come to market, so too should there be consideration for how both issuers and merchants will
be able to help the consumer identify what payments were made over what channels, whether they be fridges or cars!
New payment methods can also present an opportunity for actual fraud. As it stands, when a consumer initiates a dispute, the issuer and merchant don’t actually work together to determine the origin of the dispute, leaving each at a significant disadvantage.
But data gives them an opportunity to prevent fraud and unnecessary chargebacks, if critical merchant data can be shared between merchant and issuer.
For example, issuers can implement automated solutions which facilitate the sharing of data, such as transactional data from a merchant’s CRM system, or push notifications to merchants to review and resolve disputes faster. And just as machine learning and
AI have given rise to new payment methods, so too can they be used in authenticating payments, either through biometrics or behavioural analytics.
But all this technology used to cope with a card-less society will be redundant if the data derived from it cannot be shared with all stakeholders involved in processing a payment to help determine whether the transaction is actual fraud or friendly fraud.
Data is what issuers require to make quick, informed decisions about the validity of disputes. With instant access to the merchant’s data, issuers don’t have to guess about the truth behind the dispute claim. And collaboration tools can enable this data
exchange – allowing merchants and issuers to work together as a unified force to win the battle against chargebacks and fraud.