The online shopping experience has never been easier or faster. In fact, with one-click checkout, purchases can be completed in as little as two seconds, which means no lengthy forms, no payment details to enter, and no additional confirmation steps. For businesses, this experience translates to higher conversion rates and fewer abandoned carts. And for the customer, one-click checkout makes completing purchases nearly instantaneous.
However, all that glitters is not gold, and behind the convenience of a fast and easy checkout lies a growing concern in the shades of fraud, chargebacks, and data security. As super speedy online payments become the norm, cybercriminals are having a field day exploiting the software’s vulnerabilities, leaving both businesses and shoppers increasingly exposed to security risks.
Thankfully, we at Krepling Pay are leading a shift in the checkout landscape with a more protected and reliable approach. Ahead, we’ll dive a little deeper into the aforementioned security flaws, the real-world impact of fraud, and why online retailers need a better alternative for secure guest checkout solutions.
The concept of one-click checkout dates back to 1999 when Amazon patented the feature to reduce checkout friction. Through being one of the first major retailers to store payment details, Amazon allowed customers to complete purchases with a single click of their mouse – but after the patent expired in 2017, companies like PayPal, Apple, and Shopify introduced their own versions. Versions that promised to reduce cart abandonment and increase sales for other online retailers.
This was a revolutionary concept and one that actually works in practice exceptionally well. Research from Cornell University found that one-click checkout encourages consumers to not only shop more frequently, but buy a wider range of products, and increase spending by an average of 28.5%. For businesses, this opportunity likely seemed like a no-brainer.
After all, the benefits are hard to ignore.
For businesses, the appeal of one-click checkout is simple. The fewer steps a consumer has to take, the more likely they are to complete a purchase.
Meaning,
Investors have recognized this potential, with Bolt, one of the most well-funded one-click startups, attracting nearly $1 billion from major firms, including Peter Thiel’s fund and BlackRock. In its 2014 inception, Bolt positioned itself as an alternative to Amazon’s one-click checkout, allowing independent merchants to integrate the same frictionless experience for their customers.
However, as more businesses embraced speed over security, fraud prevention in online payments became an afterthought. Chargebacks and fraudulent transactions began to skyrocket as more businesses embraced speed over security, which ultimately led to significant losses and growing concerns about the true cost of one-click transactions.
In fact, startups like Fast, backed by Stripe, have even collapsed due to financial struggles, and Bolt hasn’t come out unscathed either, with some of the most significant layoffs of a public-facing company in the last year.
So, what went wrong?
While one-click checkout has revolutionized online shopping, its rapid adoption has outpaced security measures designed to protect consumers and businesses. The speed of these transactions leaves little room for verification, making them a prime target for fraudsters, and as cybercriminals find new ways to exploit weak authentication, businesses are experiencing a massive surge in chargebacks, fraudulent transactions, and data breaches.
Next, we’ll break down the most significant security risks of one-click checkout and why a more balanced approach between convenience and security is needed in order to keep this model sustainable.
One-click checkout is designed to remove friction, but that also means fewer security checks. Many platforms rely on stored payment credentials with minimal authentication and this creates a weak point that fraudsters can easily exploit.
Cybercriminals tend to target one-click checkout in a couple of ways, such as:
In fact, according to a comprehensive report from Sift Science, account takeover (ATO) attacks have exploded, jumping 354% year-over-year in Q2 2023 after an already alarming 169% increase in 2022. Fraudsters are using AI and automation to hijack accounts faster than ever, slipping past weak security measures to make fraudulent purchases before anyone notices.
Now, while not every ATO attack comes from one-click checkout, 31% of them do occur from online shopping, meaning one-click systems – designed for speed over security – are likely playing a major role in the problem of the secure guest checkout experience. With minimal authentication and stored payment details, a poor one-click system makes it easier for criminals to strike fast and disappear just as quickly.
How Krepling Pay Keeps Customer Data Secure
Krepling Pay integrates multi-layered security that ensures every transaction is verified without slowing down the checkout process.
Chargebacks have become one of the most damaging financial risks for e-commerce businesses, costing far more than just the disputed transaction amount, and they’ve become commonplace for nearly all online retailers.
Originally designed as a consumer protection mechanism against fraud and unauthorized purchases, chargebacks are now frequently misused, turning into a $125 billion annual problem for merchants.
Beyond the immediate loss of a sale, though, chargebacks come with additional costs in the form of processing fees that can range anywhere from $20 to $100 per dispute, increased scrutiny from payment processors, and in some cases, higher transaction fees or even account suspensions. In addition, merchants also lose the cost of the product, shipping, and operational expenses associated with dispute resolution, turning every fraudulent chargeback into a significant compounded loss.
Well, a report from Chargebacks911 found that up to 86% of chargebacks are due to friendly fraud, where consumers dispute a legitimate purchase. Consumers may be doing this because one-click shopping makes purchases so seamless they don’t even realize they’ve completed a transaction until they see the charge on their statement, leading to accidental disputes.
In other cases, a customer may have buyer’s remorse and, rather than going through the proper return process, falsely claim the product never arrived so they can secure a refund through their bank instead. That said, payment processors often side with the consumer, leaving businesses with financial losses and higher chargeback rates.
How Krepling Pay Reduces Chargebacks
Chargebacks often happen because of unclear transaction details, a lack of verification, or fraud slipping through weak security measures. Krepling Pay is built to address these pain points by prioritizing secure transactions while maintaining a streamlined checkout experience.
Most one-click checkout systems store credit card information in order to benefit the customer in anticipation of future purchases, and while this service is convenient, it’s also the same approach that has led to a large number of data breaches. High-profile breaches from online retailers such as Saks Fifth Avenue, Neiman Marcus Group, Target, and more have all demonstrated the dangers that come with relying on stored payment credentials. Once a database is compromised, hackers are able to gain access to thousands or even millions of customer payment details.
How Krepling Pay Provides a Secure Guest Checkout Solution
Instead of storing raw credit card data, Krepling Pay uses tokenized transactions, ensuring fraud prevention in online payments.
One-click checkout has changed the way consumers shop online, but the security risks that come with it have become too big to ignore. Fraud, chargebacks, and disputes have put businesses in a difficult position, forcing them to choose between convenience and security. Krepling Pay eliminates that tradeoff. Our system delivers the speed and simplicity of one-click checkout while ensuring protection against fraud, unauthorized transactions, and unnecessary chargebacks.
Retailers using Krepling Pay can monitor transactions in real-time, track revenue growth, and manage refunds and disputes with ease, all while maintaining a seamless experience for customers. With integration across all major credit card providers, businesses can accept payments confidently, knowing that every transaction is processed securely.
When you partner with us, one-click checkout doesn’t have to come at the cost of your security. Krepling Pay provides peace of mind while allowing merchants to run a successful enterprise, retain more revenue, and give customers a frictionless checkout experience.
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