The unexpected but important link between payments security and VR/AR adoption that retailers must understand
The ability to secure transactions and safeguard data serves is a true differentiator for any business or technology. In the case of virtual reality (VR) and augmented reality (AR), the consumer intrigue and appetite is there—but security concerns aren’t far behind. In fact, 42% of global consumers surveyed as part of Worldpay’s “360 consumer: how VR is reshaping the buying experience” report identified security of payment details as one of the biggest barriers to VR/AR adoption, coming in second only to the high price tag of devices. Though unease around security is present, consumers are also aware of the benefits that these technologies can bring, including saving time, more immersive shopping experiences and the ability to experience products or services they otherwise wouldn’t be able to purchase.
Despite concerns, three fifths (59%) of the 16,000 consumers surveyed across eight countries are looking for retailers to utilize VR/AR in-store and 63% want to begin seeing the technologies used within shopping apps. Rather than focusing on payments security as a hindrance to the growth of VR/AR technology usage, it may actually present enterprises with a unique opportunity to surprise and delight customers.
Shifting from interest to confidence
Demand for VR and AR technologies has never been higher. With predictions that the VR/AR market may be worth as much as $108 billion by 2021, according to Digit-Capital, it’s no wonder there’s an increased interest in seeing how these advanced technologies will transform the ways in which enterprises and consumers interact.
Though plenty of buzz surrounds these engaging platforms and the drastic changes they seek to bring, it doesn’t mean taking commerce into the virtual or augmented world will be easy. Consumers are craving more compelling and digitally driven experiences, but not if that means sacrificing their privacy and security. For virtual commerce to thrive, the purchasing of goods and services in virtual environments must deliver peace of mind—and a user experience that provides a feeling of security above all else.
Just a quarter (25%) of global consumers surveyed view VR/AR devices as secure enough to buy products and services, but the comfort levels vary drastically based on the country. Only 23% of Dutch consumers surveyed view these devices as safe for making payments, compared to 59% of shoppers surveyed in China. In the UK, only 35% of respondents would even consider making a purchase using VR/AR.
Consumers in Western markets tend to be less comfortable with the idea of making payments in VR, which contrasts starkly to the Chinese market, where mobile-driven consumers are open and eager to expand their interactions with merchants beyond the desktop environment.
For VR/AR adoption to grow on a global scale, the technologies and how they approach payments have to be positioned as more than just the latest, greatest innovation—consumers must see a true need for virtual commerce and the benefits it brings to their everyday lives.
The new security opportunity
In approaching VR payments, thinking about the methods being used to safeguard online purchases can ease some of the uncertainties associated with virtual commerce. While a fifth (19%) of consumers surveyed expressed that they would never be comfortable using VR/AR to make purchases, Worldpay’s research also found that there is still an opportunity to help change those perceptions.
Consumers from around the world said they would be more comfortable using VR/AR devices for payments if various advanced security capabilities were made available. For instance, 38% of respondents said fingerprint scanning would make them more comfortable with VR payments. Integrating trusted security capabilities within the VR/AR environment helps to replicate real-world commerce experiences and establish confidence in the security of purchases.
Security methods like entering a secret code or password (32%) or providing alternative payment methods such as PayPal (29%) were also identified by consumers as ways to alleviate payment security concerns in VR/AR. From retina scanning to allowing payments to take place similarly to how they do in the real world, there are many security and data entry considerations that can positively impact VR as a commerce platform.
By seeing payments security as a ripe VR/AR opportunity—not solely an adoption barrier—enterprises have the potential to deliver unmatched user experiences that are both engaging and secure.
Casey Bullock is general manager, global e-commerce – North America for Worldpay. Current responsibilities include managing all commercial personnel working directly with Worldpay’s clients in the North America region. Prior to Worldpay, Mr. Bullock was VP, GM fraud solution for Chase Paymentech focused on the creation and delivery of enterprise-class fraud prevention capabilities into the ecommerce marketplace.