Consumers have more payment options than ever, and innovation competition has intensified. So has fraud. Zelle — one of the fastest-growing payments networks in the U.S. — recently announced that approximately 0.1% of 2023 transactions were reported as fraud or scams. However, while security and authentication should be paramount, not all providers are on high alert.
Looking at the in-app new payee authentication requirements of U.S.-based retail checking providers tracked by the Curinos’ Digital Banking Analyzer, the stats are stark. Of those that allow users to manually add a new payee to pay a bill, company or person with an account number, just 10% request an additional layer of authentication when paying the new payee. Within P2P and the ability to make payments without using a bank account number, just 14% request the additional authentication layer when completing a new payment.
Part of the battle against fraud is in building awareness as well as deterrence, and indeed, Zelle sent out 700 million alerts before a payment was completed last year. The wider market must be proactive.
U.S. payment providers must strike the right balance between maintaining and enhancing a simplified user experience and protecting themselves and their customers. One good way is to study how the market leaders set the standard. Doing this can be the crucial first step in keeping up with them.
