Many consumers are willing to take steps to protect their data. E-retailers should encourage those actions.

Providing a seamless and secure checkout experience for consumers has become a critical step for merchants as their customers increasingly shift more of their financial lives – from making purchases to checking account balances – to digital channels.

The 2016 American Express Digital Payments Security Survey of 1,021 web shoppers and 401 online merchants found that roughly half of consumers who shopped online in the past year have experienced payment fraud, representing nearly 80 million online consumers. So it’s easy to see why 40% of consumers believe shopping online is riskier than making a purchase in store (28%).

Alleviate Consumers’ Anxiety about Shopping Online

Consumers’ perceptions of security does affect their behavior. In our survey, 42% of shoppers said they have abandoned an online purchase due to payment security concerns. Therefore, it is vital for merchants to increase investments in security and fraud-prevention capabilities to address their customer’s concerns. Doing so may even lead to improved customer loyalty and digital sales.

Many merchants are already taking steps to increase security. On average, merchants are investing 28% of their IT budgets on digital security, and nearly half are planning increased investments for payment security next year, according to the Digital Payments Security Survey.


So what can merchants do to protect their digital channels?

  • Use security codes: Nearly 78% of online consumers surveyed said they are willing to enter a security code (CVV) when shopping, but only 57% of merchants require shoppers to provide one.
  • Provide security questions: Although 70% of online shoppers say they would answer security questions, only 43% of merchants make such questions available.
  • Enable customers to create profiles: 63% of online consumers are open to creating a profile in order to complete a purchase, but less than half of merchants offer the option to do so.

Empower Customers to Take Security Precautions

Consumers can also play a role in the fight against fraud. One easy step to increasing security is calling on shoppers to improve their passwords. According to our survey, 44% of shoppers use a different password for every online account; 30% change their passwords once or twice a year; and 17% never change their passwords. We recommend that consumers create different passwords across all accounts and update these passwords frequently.

For merchants looking to enhance their security and potentially drive more sales, the following steps can help create a more secure environment for their digital customers:

  • Visible security cues: Seventy-eight percent of online consumers say they want visible security cues, but only 52% of merchants report using data encryption on their sites.
  • Increase communication with consumers: Shoppers want easy-to-find customer service contact information and to receive regular status updates on orders they have placed.
  • Consider tokenization and 3-D Secure: 3-D Secure is a global industry standard that detects and reduces online fraud by validating the card member’s identity through risk-based authentication and dynamic one-time passcodes.

Fraud-prevention and security are already top of mind for many merchants. As consumers become more comfortable with making purchases online and on mobile devices, the need to stay at the forefront of security will remain critical. Taking proactive steps that address consumers’ security concerns and provide a seamless checkout experience can help set your business up for success in the new year.