In recent years, the number of businesses and services operating online has skyrocketed. For online consumers, a key part of the appeal is convenience. Secure payments, ecommerce accounts, personalised product offerings and subscription services are all just a click away.

To keep pace with consumers’ evolving expectations, businesses are turning their attention to removing the infamous F-word – ‘Friction’ – from the online customer journey. Wherever possible, processes are being made faster, easier and more rewarding to increase conversion rates and bring customers back again and again.

Whilst asking how best to streamline the digital experience, we should perhaps also be asking to what extent businesses should remove friction from online transactions. The idea of a frictionless experience may not seem like a problem for ecommerce sites – naturally, they want shoppers to find purchasing their products as easy as possible. And yet, the ‘friction’ involved with making payments has important societal functions.

‘Friction’ causes people to stop and think about a purchase, making them less likely to be scammed. ‘Friction’ also means allowing time for necessary processes such as identity verification to take place, protecting customer data and helping businesses to mitigate fraud. In other words, ‘pain-free’ payments have the potential to cause harm.

Claire Norman, head of Financial Crime at Jaja Finance warns against making things too easy online. ‘Without digital ID,’ says Norman. ‘It can be very hard to work out whether someone is genuinely trying to make a transaction or being defrauded. But I would say that, for the customer, knowing that their personal information is secure is more important than making things easy for the service provider’.

It is not necessarily surprising that apps and websites are removing many of the speed bumps that ensure customers proceed with care. To be successful online, businesses have to attract and retain people’s attention with competition just a click away. And research shows that when people don’t think about money, they spend more of it.

However, prioritising transaction speed, at the expense of trust, can be a costly mistake to make. Businesses should not view friction as a negative in every circumstance, instead a distinction should be made between positive and negative friction. Unnecessary friction – such as over complicated checkout processes, or broken features on a website or app – should of course be avoided. But, as Russ Cohn General Manager, International at OCR Labs explains, to a certain extent, positive friction is necessary to ensure a transaction is secure.

‘Everyone wants ‘pain-free’’, Cohn notes, ‘But there is a threshold that must be met and both customers and businesses understand that this requires jumping some hurdles. As long as the process isn’t too intrusive, or too time-consuming, customers actually feel more comfortable knowing a business has stringent fraud checks in place to protect them.’

The more we turn to online services, the more pressing the need for a way to replicate the safeguards we often take for granted offline. If embedded seamlessly into the online customer journey, positive forms of friction such as identity verification will reduce a business’ vulnerability to fraud and encourage customers to pause and verify their purchases.

As Cohn says, “if there was such a thing as a genuinely ‘frictionless’ transaction, it would happen instantly with no checks or exchange of information required. People expect a process, but what we can do is make that process the best and easiest it can be.”

This article includes extracts from our latest Industry Insights report – ‘The Future of Identity is Embedded’.

For more on friction, fraud and the online customer experience in 2021 download the report now.