Mobile Identity Could be Your Answer for Friction and Compliance with PSD2

Here is an anecdote for you. On Sunday, I wanted to watch the cinematic masterpiece The Royal Tenenbaums. I tried to log-in to my AppleID to rent the movie for $3.99 and then realized I had forgotten my password. I have a thousand passwords and now they're all long, have numbers and letters; special characters! Sure I could have triggered a password reset and walked across the room to check my email, but at this particular moment, I didn't feel like doing that. Also inputting a password with an Apple TV remote is hard. (Work on your UX Apple)So what did I do? I flipped back to Cable and watched a seventh consecutive episode of Chopped on the Food Network. I regret nothing.

Friction and Churn

This is an example of friction and churn.Friction is a barrier put in front of me (such as a password) to complete a purchase.Churn is when friction causes someone to abandon a purchase.I.E. Because I forgot my password (friction) I decided instead to watch Guy Fieri make lamb chop nachos (churn) that looked delicious.In the grand scheme of things, Apple probably won't miss my $3.99 but extrapolated over thousands or even millions of transactions, that three bucks turns into a pretty solid chunk of change.One company that doesn't want to take that kind of beating lying down is Mastercard. Mastercard's analysts have suggested that up to 20% of mobile e-commerce transactions are abandoned mid-way. One of the markets most heavily affected was the Indian market so Mastercard needed a way to combat churn and lost revenues in India. This led Mastercard to announce Identity Check Express. Mastercard is touting Identity Check Express as a “next generation, mobile first authentication solution that aims to redefine the e-commerce journey for millions of Indian consumers.” Put plainly, the technology is meant to eliminate friction and enhance security of online transactions.

Regulatory Compliance

The technology works by combining device intelligence and behavioral biometrics with the latest EMV 3-D Secure and FIDO authentication standards for a smooth mobile payment experience. We have seen other companies experimenting with similar methods in Europe in advance of Strong Customer Authentication and PSD2.With Identity Check Express many low value transactions will be completely frictionless and rely on certain known device data points. For higher transactions above 2,000 Indian rupees a one time passcode (OTP) will be sent to a user's device to authorize the payment. Many devices can automatically input this code which will greatly increase efficiency over the status quo.Mobile identity solutions are more important now that it has ever been, with companies such as Mastercard investing in these solutions to remove friction. Furthermore, these types of streamlined processes will be mandated by law eventually under policies like the EU's PSD2. The prudent thing for enterprises to do is invest in these solutions not only from a compliance point of view, but also to stop losing valuable revenues on churn.TeleSign offers a full suite of data solutions that can solve for these secure authentication use cases. We can provide valuable insights that keep your users safe but also remove friction from Card Not Present transactions. Want to learn more? Of course you do, click here to find out all the cool things we are doing with data and how in the future, people like me will never be deprived a Wes Anderson movie again.

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