When you think about the potential China and Southeast Asia have in terms of mobile usage, mobile transactions, and e-commerce in general - you instinctively know its huge. But it still baffles me when I see the data.
There are over 800 million unique mobile internet users in the world’s most populous country, and in 2017 they spent more than $245 billion in online retail. The numbers for 2018 are still not in, but you can be sure the growth will be huge.
Let me put another number in front of you - 64% of Chinese consumers say they intend to increase online shopping in the future. This goes to show how humongous e-commerce potential of the this country alone is. And currently it contributes to a quarter of all annual B2C transactions worldwide.
When we add Southeast Asia to the mix, and more than a billion of users, the potential sky rockets!
However, whether this potential will actually be fulfilled depends on where user trust and confidence stand in a time when they increasingly fear the possibility of online fraud and other types of cyber attacks.
User Trust Eroded by Inconvenient & Insecure Authentication Options
More than three-quarters of users across Asia have experienced some type of online theft which has resulted in low user trust and losses for companies in the Asia Pacific region.
Total cost of cyber attacks for companies in the region was more than $171 billion in 2017. And 1,000 businesses are expected to lose $750 billion in market capitalization by 2025 - as a direct result of cyber security failures.
To prevent such losses and for e-commerce to reach its full potential - effective authentication solutions are a must to protect the digital identity, and especially mobile identity of the users.
This rapid development of e-commerce has sparked an increase in the number of online businesses, all of which expect the user to register to be able to use their services and/or to buy products.
The majority of these websites still rely on the simple username and password authentication, sometimes protected by SMS 2FA and very rarely with some better methods. And although sometimes these methods can be safe enough - they are never convenient.
But consumers value convenience and ease of use much more than anything else.
According to PYMNTS’s Digital Identity study - more than 70% of users prefer an authentication method for its ease of use. Add to that GSMA’s research that found that 86% of users have left a website when asked to register, and it’s clear what has to be done.
No compromising between convenience and security - we need a seamless authentication option able to verify the digital identity of a user and their transactions with minimal risk.
However, the goal of having an all-encompassing authentication solution is not out of reach.
Industry’s collaborative answer to the question of digital identity is GSMA’s Mobile Connect, a set of specifications authentication technologies are considered compliant with after successfully passing their test suite.
Online Businesses Can Win Consumer Confidence by Utilizing Seamless Mobile Authentication
In times when many methods are less than secure (header enrichment for one), some risk user privacy (think biometrics), and some are complicating UX for the sake of security (hardware 2FA for instance), it’s clear that new solution is needed.
And our own IPification is it. We refused to make compromises between security and UX, and developed an optimal solution from the operators’, merchants’ and users’ perspective alike. We also made it compliant with GSMA’s Mobile Connect.
Relying on mobile network operator data, in combination with SIM card and device data, while detecting any possible changes, enables us to quickly and seamlessly verify a user’s digital identity.
Also there is no compromises with their privacy, as not a single shred of information mobile operator knows about the user is shared with an e-commerce app that is being used.
The whole authentication process is done seamlessly, in the background, in a matter of fractions of a second.
In the year where we can expect e-commerce in China and Southeast Asia to grow exponentially, having this kind of solution will be crucial for online retailers’ success.
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June 19, 2019IPification CEO at GSMA MWC Shanghai Identity Seminar