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Touchtech Payments Ltd
IntroductionTouchtech provides simple, secure authentication solutions to the world’s most innovative financial institutions such as N26, Revolut & Transferwise.
Our solutions are seamless omni-channel experiences at the core of banks’ digital transformation efforts.
With a keen focus on design thinking and utilising machine learning, Touchtech ensures that complying with regulations goes hand-in-hand with boosting online user experiences.
An example of this success in optimising customer journeys is that customers of our 3D-Secure solution typically enjoy 40% reductions in cart abandonment.
Building on our success with authenticating online card payments, Touchtech is developing its offerings for other Strong Customer Authentication and electronic signature requirements arising from new EU directives which are followed in the UK.
PSD2: A game-changer for banksBanks currently hold their customers’ data in closed silos. From 2019, this will be utterly changed by PSD2 and Open Banking.
By 3Q-2019, European banks will need to begin providing Strong Customer Authentication (SCA) for all online purchases and for many other access requests.
Traditional password-based solutions are not considered SCA, making them non-compliant.
SMS-based solutions continue to offer poor user experience, high costs and increasingly exploitable vectors of attack.
Authentication under the incoming PSD2 / Open Banking standards will become an acute pain point for customers of banks that fail to update their authentication methods.
Abandonment and transaction costs will become problematic for banks as the number of scenarios requiring authentication increases dramatically.
This problem can only be solved by low friction, low cost authentication.
Touchtech’s 3D Secure solutionTouchtech’s Transaction Authentication Platform (TAP) offers a great PSD2-compliant user experience for online shopping.
TAP is a Strong Customer Authentication, 3D Secure solution. It is certified by both Visa and Mastercard (as well as Payment Card Industry Data Security Standard) and is implemented for banks in cooperation with these schemes.
Unlike other 3D Secure solutions, TAP does not use passwords or SMS; instead leveraging possession and biometric factors (e.g. smartphone, fingerprint, retina scan).
TAP is offered alongside a variety of alternative solutions to cater also for non-smartphone customers. TAP as implemented with N26
Case study: N26Touchtech provides a 3D Secure solution for online card payments to the world’s most admired digital bank, N26.
In November, N26 carried out a survey on its 3D Secure customer journey. Customers rated Touchtech’s solution at 4.41 out of 5.
This contrasts starkly to the criticism that other solutions receive through social media which negatively impact banks’ Net Promoter Scores and puts pressure on contact centers.
N26 enjoys a 40% reduction in cart abandonment versus SMS-based solutions as well as an 80% reduction in fraud versus their previous process.
Touchtech and the Irish Prime Minister launching partnership with N26 in Berlin (April 2017)
Benefits for all internal stakeholders
- Reduced cart abandonment - Improved User Experience - Better Net Promoter Scores
Retail / Digital
- Increased interchange- Increased lending opportunities
Cards
- Fraud reduction- Mitigation of common vectors of fraud such
as ‘man in the middle’, ‘replay’ and ‘SIM cloning’
Security/Fraud
- Challenging aspect of PSD2 solved in 8 weeks- Touchtech has all certifications and very happy
reference clients
Compliance / Risk
- Light integration- Agility: Our microservice architecture makes
configuration, feature addition and A/B experimentation quick and easy
- This will prevent the solution from becoming outdated, which is a major failing of incumbent offerings.
IT
Benefit analysisInterchange boostTouchtech’s solution allows banks in the UK to reduce cart abandonment for a £1.45 gain in interchange annually that would have otherwise been lost.
Increased LendingApproximately half of credit card usage is online. Touchtech will reduce online cart abandonment by 40%, thus boosting credit card lending.
Cost savingsSMS messages, in addition to inconvenience and security vulnerability, are expensive. At an average cost of £0.03 per message, Touchtech can save British banks £0.21 per card per year.
UK banks interchange
Average customer online spend (2015) £4,611
Interchange (3:1 debit and credit) 0.225%
Interchange to Issuer per customer £10.37
Abandonment due to 3D Secure 35%
Interchange loss of existing 3D Secure £3.63Touchtech can reduce that figure by 40% £1.45
Average annual number of 3DS transactions under PSD2 14Average cost per SMS £0.03SMS cost under PSD2 £0.42
Touchtech can halve that figure £0.21
Total cost saving of TAP per customer £1.66
Benefit analysisSolve SMS IssuesIn order to comply with PSD2, many banks may consider SMS One-Time Passwords. In addition to serious security vulnerabilities (SIM cloning/swapping etc), approximately 18% of SMS fail, leading to angry customers and abandoned transactions.
User ExperienceDigital channels are the key battlegrounds to attract and retain the best customer demographics. Banks which do not keep pace with customers’ expectations will lose young, tech-savvy clients to challenger institutions. This demographic, according to KPMG, will account for 70% of retail banking revenue by 2030.
Social media reviews of TAP
TAP IntegrationA standard integration takes approximately 8 weeks. The primary steps are: functional testing, API integration, SDK integration, and card enrolment.
API integration (2-3 weeks) is very simple, and can be done simultaneously with SDK integration (4-6 weeks).
Card enrolment takes only a few days following completion of the previous steps. All of these timeframes are far quicker than competing solutions.
Integration is completed so that a bank gets exactly the authentication experience it wants for all its various customer demographics (and any post-implementation alteration requests are carried out with minimal fuss).
Biometric SCANearly 90% of bank customers born after 1960 want to switch from password-based authentication to another identification method. PSD2 mandates Strong Customer Authentication (SCA) not only for card payments, but also for the millions of Open Banking access requests which will occur daily.
Financial institutions in Ireland and the UK are already using Biometric Logins from Touchtech in order to improve experiences on online channels and to achieve digital transformation objectives.
eSignaturesQualified signatures are electronic stamps which meet requirements set out in the EU’s eIDAS (electronic IDentification, Authentication and trust Services) Regulation.
eSigning documents will be core to banks’ digital transformation strategies as they seek to move on from the expense and inconvenience of signing documents via post or in branches.
Touchtech’s solution builds on our expertise satisfying regulatory and security objectives while simultaneously boosting user experiences across all digital channels.
