TOP 5 most reliable and user-friendly authentication methods in online payments - Cybersecurity ASEE (2024)

The interdependence of security and user experience is an everlasting topic. A common denominator that ties these two together is the authentication method used during online payment processing. Explore which authentication methods provide a seamless user experience while keeping you secure from fraudulent attacks.

Authentication methods in a nutshell

The definition of authentication can be explained as a process of identifying a user requesting access to a particular service. Until recently, simple credentials in the form of a username and password would suffice, but with today's security standards, we need something much stronger.

Different business requirements demand different security levels, achieved by carefully choosing or combining various authentication methods available. When it comes to user experience, it plays a significant role in user satisfaction during online payment processing. Therefore, the authentication method applied must provide convenience and security at the same time. If the authentication process does not offer convenience and runs smoothly, it causes high cart abandonment rates. On the other hand, if the authentication does not provide appropriate security measures, the threat of fraudulent activities involving payment cards rises and results in chargeback costs.

Balancing between security and user experience is a challenge, but we at ASEE know how to approach this issue. The answer lies in Strong Customer Authentication (SCA) that enables various authentication methods tailored to the user's needs.

PSD2 driving innovation in online payment security

As a part of the PSD2 regulation from September 2019, Strong Customer Authentication (SCA) requirement is in force. SCA presents an additional layer of security in online payments and is based on at least two authentication factors from the following categories:

• knowledge (what the cardholder knows, e.g., PIN, password),
• possession (what the cardholder has, e.g., phone, hardware token),
• inherence (what the cardholder is, e.g., facial recognition, fingerprints).

This means that stakeholders needed to get creative and adopt a variety of authentication methods available for the end-user in order to be able to process a seamless and secure online payment.

Our top 5 authentication methods

We prepared a comprehensive list of authentication methods that provide both security and convenience during the processing of an online payment. Let's dig in!

1. Biometric Authentication Methods

Biometric authentication relies on the unique biological traits of a user in order to verify their identity. This makes biometrics one of the most secure authentication methods as of today. Additionally, it causes less friction during the authentication process in comparison to previously mentioned methods, making for a great user experience. Most common identifiers include fingerprint scans, facial recognition, and voice-based identification.

2. QR Code

QR code authentication is typically used for user authentication and transaction validation. A typical flow for transaction verification starts with the user logging into their internet banking web application and opening a payment order. The internet banking application offers the user to process this payment using a QR code presented on the screen. To process the payment, the user needs to scan the QR code with their smartphone using authenticator software (can be apart of their mobile banking application). To finalize the payment, the user is presented with transaction details and, upon inspecting the validity of the showcased data, the user additionally confirms the online payment.

3. SMS OTP

This simple yet effective authentication method involves sending an SMS message to the user's mobile phone, containing a one-time password used for finalizing the authentication of online payments.

4. Push Notification Authentication Method

A push-based authentication system sends a notification to an app on a user's device, informing them about an authentication attempt. The user is able to inspect the details of the authentication attempt, and based on their knowledge about an, e.g., the transaction taking place, either confirm or deny request verification.

5. Behavioral Authentication Method

Behavioral authentication verifies a user's identity based on unique patterns recorded during interaction with devices (e.g., smartphone, tablet, computer). Identification factors include everything from the angle at which the user is holding their phone to pressure applied while typing. This type of authentication method allows for a genuinely frictionless experience without having to worry about the level of security it is providing the user with.

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