According to a new study of electronic payment trends, organizations plan to adopt new payments forms like digital wallets, even though worry about security.
A new survey, which was commissioned by HP Atalla and conducted by the Ponemon Institute, found that 79% of respondents planned to support digital currencies like bitcoin in the future. Besides, 80% of the 634 US residents surveyed said they expect digital currencies to overtake paper currencies in the future.
This year payments stories have been dominated by a seemingly unending string of data breaches, putting security at the forefront of the agenda for the industry. Authenticating users to prevent intervention by criminals tops the list of concerns when implementing new electronic payment systems.
“Support for virtual currencies is being driven by two components: economics and security,” explained Albert Biketi, a general manager of HP Atalla enterprise security products. “It’s a way to break the economics of the system that imposes transaction fees that can add up for a merchant. For a large retailer, having 3% to 4% [of your revenues] being charged for transaction fees can be a lot of money.”
The survey’s authors mentioned that the participants, mainly working in IT operations, security and technology formation, are “all familiar with and involved” in their organizations’ electronic payments practices.
In addition to digital currencies, the survey also deals with security, authentication systems, emerging technologies, wireless standards such as NFC (Near Field Communication) and mobile services, such as Google Wallet and Apple Pay.
Bitcoin’s blockchain establishes more trust in the system, since a third party verifies every transaction.
“It’s a system built on aggregate trust. You’re not just trusting one institution [with the transaction]. If you look at the architecture of Bitcoin – it’s really hard to cheat. And every transaction is logged in near real time.”
Besides, the survey also found that data privacy is not an urgent concern, compared to security for organizations adopting new payment technologies. Only 38% of the respondents said that would be wary of new payment technologies to protect the privacy of their data.
“I think consumers realize that the data that they share with their banks and retailers helps those organizations serve them better. Retailers especially rely on that data to serve their customers better. It’s how they create value for their customers,” noted Biketi.
Tokenization covered the list of security measures that could help alleviate the authentication concerns over new payments methods, the survey found.
“Attackers right now are very focused on getting credentials and valuable data. Tokenization is an excellent way to neutralize [the impact of] breaches,” suggested Biketi.
About 75% of the respondents said that tokens and one-time passwords were “essential” or “very important” to securing new payments methods, though only 48% said their organization uses them for security.
“Tokenization hasn’t been widely adopted because of structural and budget issues. I think it will gradually become a basic standard. But there are different approaches to deploying tokenization, and organizations want to extend it to as many systems as possible. That can be difficult across some [complex] architectures,” explained Albert Biketi.
In general, the survey shows that perceptions of new electronic payment systems are positive and digital currencies have their fair share of support. However, while digital wallets are popular, respondents remain concerned about security risks. The survey indicates that the single biggest barrier to adoption of innovative payment technologies is security. It assumes that widespread adoption of digital currencies is inevitable because both customers and companies are willing to embrace them.
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