Customers Willing to Switch Issuers for Better Fraud Protection, Survey Results Reveal (2/3)
In part 1 of our series, we highlighted a survey showing that consumers are willing to pay more for a credit or debit card featuring dynamic security code technology. But if card issuers are reluctant to offer such an upgrade to payment cards, would consumers be willing to take their business elsewhere?
Card Holders Value Better Fraud Protection from Issuers
Card holders are increasingly becoming savvier about the state of fraud in the payment industry and becoming more wary about who they give their business to. According to research by PYMNTS, 69% of consumers prioritize fraud protection when selecting a financial institution, and nearly a third (32%) “consider this the most critical factor in their decision-making.”
The year-over-year increase in fraud has forced consumers to take matters into their own hands and be more selective with their banks and credit card issuers, even in light of the industry-standard “zero liability” benefit inherent to credit cards. This suggests that the inconvenience and lost sense of security can outweigh even the perceived benefit of fraud-loss reimbursements.
Consumers Willing to Switch Issuers for Better, Easier Fraud Protection
Furthermore, today’s card holders are more likely to switch issuers for better protection. A recent survey conducted by FIS (Fidelity Information Services) showed that when shown a card with dynamic security code technology such as EVC® from Ellipse, half of all card holders (50%), both credit and debit, would switch cards – and thus, their issuers – if they did not offer cards with this feature included.
Another data point that the survey uncovered was that customers were looking for a less app-based fraud prevention solution. When given the option of a dynamic security code that is on-card versus on-app, card holders were more likely to choose the former. 57% would “definitely” or “probably” adopt the card-based technology over the app-based technology (39%).
This highlights the desire for easy, frictionless solutions to combat fraud. By embedding the dynamic code technology in the card itself without the need of a secondary device, the experience is more convenient and doesn’t disrupt their payment habits at the register.
These survey results show that banks and other payment card issuers are at risk of losing customers if they don’t offer convenient fraud protection technology that fit into the habits and lifestyles of today’s card holders. Even app-based solutions can add friction to the customer experience, and data suggests market share can be won by implementing a card-based fraud solution.
Note: This survey was conducted by FIS in the US across 2000 participants.
For more information on EVC, a battery-free module developed by Ellipse, click here.