Consumers want to maintain choice over how they pay, says new research
- Majority of consumers surveyed (67 per cent) would be displeased if their preferred choice of payment network brand was overridden and 61 per cent believe retailers should not decide on their behalf how their online debit card purchase gets processed.
- Over a quarter of consumers (29 per cent) would shop elsewhere if retailers were to override their payment network preference.
- Security-related benefits top the list of features considered important while paying with a debit card online.
New research has revealed consumer preference to maintain choice over how their online debit payments are processed, according to insights revealed today by Visa.
The Visa-commissioned independent research, “Consumer preference for routing debit transactions in Australia”, was conducted by global strategy consultancy CLEAR in May 2021, surveying 2,045 Australian debit cardholders online. The research canvassed Australian consumer attitudes about how their debit transactions are routed, finding that 61% of consumers felt that they and not retailers, should decide how their online debit card purchase gets processedi, and that security benefits were considered even more important for online commerceii.
The majority of consumers (67 per cent) said they would be displeased if a retailer was to override their preferred choice of payment network brandiii. A further 61 per cent of consumers felt that they should be the ones to decide how their online debit card purchase gets processed and retailers should not decide for themiv.
Security benefits top the list of features considered important when using a debit card to make payments and were considered even more important for online debit payments than face to face. Almost three in four consumers (73 per cent) considered fraudulent purchase protection a very important benefit. Ensuring personal data remains confidential and getting fraudulent purchase alerts were equal second leading factors (70 per cent each), according to consumers.v
Julian Potter, Visa Group Country Manager for Australia, New Zealand and South Pacific, said these strong preferences highlight consumers’ expectations of choice in their online payments and the importance they place on security such as fraud and personal data protection.
“Online transactions are an increasingly popular payment preference amongst Australian consumers in today’s world of digital commerce, serving as a reminder that choice, security and convenience are the hallmarks of a great consumer experience. With commerce being conducted online at a fast-growing rate, consumers rightfully place importance on their own choice and security rights being upheld when they spend online,” said Potter.
Visa is pioneering the use of neural networks, modeled on the human brain, to power its AI technology that analyses the riskiness of transactions in real time, assessing more than 500 risk attributes to find and stop fraud. Every single Visa transaction goes through this sophisticated AI risk assessment within approximately one millisecond, ensuring good sales go through.
“Put simply, commerce is moving online, so fraudsters are focusing their efforts online. And while Visa’s AI security helps make every single split-second assessment more sophisticated, fraudsters will find new ways to commit online fraud. So by ensuring the sector safeguards payment choice and security, as an ecosystem we can be assured we’re doing everything we can to prevent buyers and sellers from becoming victims of such fraud,” Potter added.
Shopping cart abandonment
The research also showed that if a consumer’s choice of payment network was overridden, this could impact who they would shop and spend with. Specifically, over a quarter (29 per cent) of respondents said they would shop elsewhere if their choice of payment network brand to process the online debit transaction was overridden by a retailervi, highlighting the potential impact to businesses.
Potter says these insights are major factors to keep in mind as Australia’s payments sector navigates new players continually entering the changing commerce scene and reviews current proposed changes to how online debit transactions are processed.
“Visa recognises the online payments landscape is highly complex, competitive and fundamentally different to the type of payment experience delivered in-store. Furthermore, networks are also fundamentally different in terms of their risk, security and operational profile, as well as in their functionality.
Visa welcomes competition in the online environment that continues to provide consumer choice, security and transparency. In our view, current online checkout pages let consumers choose their preferred payment network to process transactions, and merchants too are given choice in deciding which payment networks to display at checkout – so the existing framework serves consumer and merchant preference.”
i Respondents were asked their opinion on regulations being considered that would require retailers to notify them that their online Visa debit card purchase will be processed by another network other than Visa but not require retailers to offer them a choice as to which network they prefer their transaction to be processed by.
ii Respondents were presented with a range of different benefits and asked: Please indicate the extent to which each benefit is important to you, when you use a debit card to make payments. For each of the things that are important/very important to you when you pay with debit card, please mention if it is more important when you pay face-to-face instore, or when you pay online, or for both.
iii Respondents who use Visa or Mastercard most often as the payment brand on their debit cards were asked: If you are aware that a retailer/business may override your choice of payment brand network and use another, how would it make you feel?
iv Refer to i
v Refer to ii
vi Respondents who have used online debit payment on their dual-brand cards were asked: If you are aware that a retailer/business may override your choice of payment brand network and use another, how would it impact you?
About the research
The Visa-commissioned independent research, “Consumer preference for routing debit transactions in Australia”, was conducted by global strategy consultancy CLEAR in May 2021, surveying 2,045 Australian debit cardholders online. The research canvassed Australian consumer attitudes about how their debit transactions are routed. The quantitative study consisted of a 20-minute online survey and canvassed Australian residents aged 18-75 years across all income groups and all working statuses.
About merchant choice routing
In May, the Reserve Bank of Australia (RBA) released its preliminary conclusions to the Review of Retail Payments Regulation. In it, the RBA outlines three policy options in relation to the provision of Least Cost Routing (also known as merchant choice routing) in the online environment.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, https://usa.visa.com/visa-everywhere/blog.html and @VisaNews.