Chip Shield has launched a personal chip card reader to target payment security vulnerabilities in US online commerce. While it achieves a good level of security, there is still room to improve the convenience features.
In 2014, the value of online commerce sales in the US hit $311.9bn. The market’s high value makes it attractive to fraudsters, who have caused almost 15% of US consumers to be victims of online card payment compromise as per our Payment Fraud Customer Analytics.
With 56% of consumers believing that banks are not doing enough to protect them from fraud, a new product aiming to mitigate this is the personal chip card reader developed by Chip Shield. Its security feature is based on direct interaction with a credit or debit card chip to generate dynamic card numbers for purchases. While Chip Shield’s security is valuable (especially for banks and merchants) it comes at the cost of customer convenience. This is because connecting the reader to the device (computer or smartphone) and inserting the card are additional steps to the transaction compared to one-click checkouts, which are being increasingly adopted by customers.
For US consumers, the relationship between convenience and security tends to balance towards the former across the majority of payment tools, meaning they will choose less engaging, more frictionless means for fraud prevention. Payment security providers could replace hardware-based products with smarter fraud detection software in order to remain competitive in the market and successfully prevent losses from online commerce.
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