Alright, now let’s be honest: us humans, as a species, are notoriously bad at changing our habits.
You know the drill: it’s January 1st, and you’re brimming with determination, convinced this is the year you finally hit the gym, eat organic salads for lunch, and log off of social media for good. Fast forward to February, and the gym shoes are gathering dust, the kale is rotting in the fridge, and your daily screentime is up 50%.
But don’t be too hard on yourself: statistics prove that it’s hard for everyone. A staggering majority of New Year’s resolutions fail. In fact, most people give up within the first two weeks. And this phenomenon isn't just limited to personal goals either. Take the products we use, for example. A recent report revealed that 46% of Americans who tried electric cars are thinking about switching back to gas-powered vehicles. Why? Because dealing with the limited charging infrastructure and range anxiety of electric vehicles can be more of a hassle than gassing up when your tank is full. Humans crave convenience like a dog craves belly rubs. If a habit change or a new product is too inconvenient, we’ll ditch it faster than you can say “innovation.”
The amount of change we’re willing to endure is correlated to the amount of friction that comes in changing our pattern of behavior. The higher the friction – for example, changing the way you’ve been buying groceries for 20 years – the less likely any change will stick.
Friction in the Payment Industry
The grocery shopping example above isn’t something we just pulled out of a hat. In order to combat payment card fraud, the industry has been introducing new methods and new technologies to banks, merchants, and individuals.
In the past decade, these new technologies include biometric payments that make it possible for personal biological information like your fingerprint, face, or voice, to serve as identity confirmation for payments; superapps – more commonly used in Asia and especially China than in the Western world – that are all-in-one mobile application that provide a wide range of functions, including payments; and digital wallets, which are unified apps or folders that stores payment information or virtual payment tools on your smartphone or mobile device.
But despite all these efforts, card fraud is actually increasing. So what’s going on here?
Life In Plastic, It’s Fantastic!
New payment methods seem to spring up all the time but when it comes to day-to-day transactions, physical cards are still used more often than ever. In fact, recent surveys show that the number of customers who feel physical cards are easier to use than mobile apps are increasing. That’s right, plastic (and metal, if you’re fancy) cards keep winning because they’re just so darn easy to tap, swipe, and dip. For mobile apps, users have to take out their phones, unlock it, perhaps even select an app. Sure, it may take just seconds with practice, but it will probably never be as fast as just using a card.
And keep in mind, it’s a new habit to learn (and one to unlearn). Hence, friction.
Another concern: new technologies offer new opportunities to frausters. For example, in 2022, digital wallets were the payment method that experienced the greatest increase in fraud. More fraud means more hassle, and more hassle means more people are sticking with their trusty cards. For these reasons – friction, fraud, and more – it has been theorized that superapps might never make significant inroads in the US, despite significant backing from the likes of Zuckerberg. American consumers are just too set in their ways.
So just imagine you’re at the grocery store. Your arms are loaded with enough snacks to survive a zombie apocalypse. Do you really want to juggle your phone, make sure it’s charged, unlock it, open an app, scroll through your saved digital cards, scan a code, hold it up to your iris, enter a code from a text confirmation, and solve a riddle (probably) to pay? No. A quick tap of your physical credit or debit card and you’re out the door.
Human Behavior 101: Friction is the Enemy
For a new piece of tech to significantly change how people go about their day-to-day, it has to be integrated nearly seamlessly, or else it will take a very long time to establish itself. The best chance of adoption comes from being friction-free. Apple built their empire on this principle, creating products that “just work,” designed with human usage in mind. Most cardholders agree with this sentiment. In fact, reports show that 60% of consumers would switch merchants altogether if the merchant didn’t accept their preferred payment method. The lesson here? Increased friction leads to lower adoption rates and ultimately hurts sales.
So, when the payment industry can remove friction great progress happens. For example, the invention of credit cards greatly simplified and streamlined the payment process. As a result of this frictionless design and convenience, credit card use grew until there were more than 827 million credit cards in circulation in the United States alone in 2022.
And when smartcard technology stalled for almost a decade, it wasn’t until the creation of EMVCo. in 1999 to standardize and “de-friction-ify” the technology that card chips were able to build momentum to becoming the global standard in card technology.
Another example of the success of frictionless payment technology is the rise of contactless cards. With the advent of Near-Field Communication (NFC) and Radio Frequency Identification (RFID) technology, contactless payment cards were born. This unprecedented convenience has certainly appealed to consumers: contactless card purchases are projected to exceed $522 billion globally by 2026.
Removing Friction in Fraud Protection
Ellipse Verification Code (EVC) is the latest payment card innovation that removes the friction individuals often encounter when they have to jump through hoops to keep their information secure. Instead of having to use a mobile device for 2-factor authentication, EVC puts a dynamic security code right onto each card itself, adding card-not-present fraud protection that’s integrated into existing user habits. The fraud protection is frictionless because it doesn’t change how you pay.
We are creatures of habit who crave convenience. The most successful technologies are those that fit effortlessly into our lives, reducing friction and making our daily routines just a bit easier. So, the next time you’re faced with a choice between a shiny new gadget and your trusty, functional tools, remember: if it ain’t broke, don’t fix it. Or at least, don’t add extra steps.
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