Global Courant 2023-05-05 12:00:17
Local merchants will soon be able to offer a faster and more seamless checkout experience to online shoppers thanks to improvements in frictionless payments, with both Visa and Mastercard launching their respective versions in South Africa.
Frictionless payments aim to minimize the steps required for online shopping to speed up transaction processes.
Frictionless checkout refers to reducing steps in both online and offline purchases to minimize customer churn and cart abandonment. Waiting times must be short, cash registers fast and transaction processes must be effortless.
“South Africa is known worldwide for its sophisticated banking sector. However, payments still have a lot of friction to ensure a more secure experience,” said Elizabeth Graham, Product Manager of Payments at Entersekt.
“Visa and Mastercard’s new standards will be rolled out shortly with the express purpose of significantly reducing unnecessary payment friction while ensuring customer safety.”
Visa’s Digital Authentication Framework (DAF) and Mastercard’s Token Authentication Framework (TAF) aim to improve transaction rates and reduce the friction of card-not-present (CNP) transactions.
A reduction in step-up challenges can also result in a better experience for shoppers. Step-up authentication is when the checkout process requires additional or increased levels of user authentication to complete the transaction.
“In general, this is the way the industry would like to move. Our goal has always been to get our customers through the checkout process as quickly as possible,” added Graham.
“Unlike the US, South African consumers are used to stepping up authentication, and the removal of challenges could be a very welcome change for them – especially those used to shopping on international sites where faster checkout is the norm .”
Visa’s DAF went into effect on April 15 this year, with all issuers required to participate in the program.
Mastercard’s TAF will go into effect next year, but it remains unclear whether it will become mandatory.
Visa said once a cardholder is verified on the merchant’s platform, all future authorization processes should follow the DAF system.
Visa added that issuers “should not request a step-up or challenge for subsequent authentication requests from the same merchant, customer and payment account that meet DAF requirements.”
In addition, Visa holds issuers liable for fraud in authenticated transactions that meet DAF requirements.
However, Mastercard’s TAF still holds merchants liable for fraud. Sellers in some regions may still be eligible for fraud liability protection.
“We will work closely with publishers with our risk-based authentication and pending records. Our ACS processes hundreds of real-time data points within fractions of seconds, so if there is a dispute, at least they have records to show that their systems picked up a high-risk transaction,” said Graham.
“However, it is likely that there will be some adjustments after the program goes live and the industry should continue to share experiences so improvements can be made.”
Sellers are encouraged to act quickly and are eligible for both systems.
Cardholders receive a screen that advises them of initial authentication, with all future transactions going through a hassle-free process when they shop at that merchant and use the same card.
“Larger traders will likely be the first to take advantage of the program and then word of the benefits will trickle down to the smaller ones. But those who choose to be early adopters will certainly enjoy an immediate boost to their customer experience when they can checkout faster, which could translate into a nice competitive advantage,” concludes Graham.
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