At this time of festivities and jollity I’d like to share what we’ve seen and learnt over the past year about protecting shoppers and what we think payment service providers can bring to the New Year.

In line with the seasonal need for lists, here’s our shopping list top 6 for 2015 to highlight the priorities for payment service providers as they seek to drive digital commerce while conveniently protecting digital shoppers:

• Secure digital identity: Retailers are waking up to the need to safeguard consumers’ identity, which has been heightened following the spate of data breaches in the US involving Home Depot, Target, Google, JP Morgan Chase among others. Offering a solution that matches security with convenience presents a valuable opportunity to stand out from your competitors. This is an opportunity for payment service providers to prepare to react smoothly on any data breaches, securing their customers’ digital identities as much as possible.

• Tokenisation: Despite the hype surrounding it, tokenisation is still no guarantee for eliminating fraud or keeping payment data secure. Background tools are still required to ensure that data is managed securely.

• 3-D Secure: It is good to see that Visa and MasterCard are reviewing the unpopular 3D-Secure password verification, which has been slowing down and spoiling the online shopping experience for customers. The opportunity is to replace it with something that is not cumbersome, reduces levels of cart abandonment and reassures consumers of the safety of a merchant’s site.

• EMV in the US: The rollout of chip in the US is not enough to make card payments secure. Card issuers need to grab the opportunity to drive holistic fraud prevention measures that will nip the move to card not present fraud in the bud. Real-time solutions, that operate in the background, without the awareness of the fraudster, or the customer, could be part of the solution.

• Biometrics: This is an interesting area that brings an exciting new dimension to payment security. In a recent trial, Mastercard combined voice and facial recognition and got a 98% identification success rate. However, if you are processing 200 million transactions a year, it means that as many as 4 million transactions will fail this authentication. Biometrics is an exciting prospect but is not yet as secure as other strong authentication methods.

• Competition: The market is getting tougher for payment service providers with the introduction of the EU and European Central Bank’s new payment services directive (PSD2). As the market opens up, payment service providers should think carefully how the prevention and management of fraud could be a business differentiator.

All of us involved in the business of payment are becoming increasingly aware of the heightened concerns around consumer security and there are countless solutions out there claiming to solve the fraud problem. For those of us with deep experience in the payment industry however, payment innovations are only exciting where security concerns have been prioritised without sacrificing convenience.  Make protecting your customers, while ensuring  ease of use, your business resolution for 2015.

We wish you a profitable and successful festive season.

Nikolaus D. Bayer, Managing Director, IRIS Analytics