As e-commerce grows, so does competition, and customer experience is the new way to win big over competitors. Consumers are firmly in control, which means merchants’ main mission is to erase friction and maximize convenience.

Many merchants’ response has been to devote their efforts to perfecting the customer experience, both online and in-store. The business objective is to make it easier for customers to buy, and to increase the likelihood for repeat sales, winning the battle for consumer loyalty. But, is an effortless buying experience truly the holy grail of digital shopping? Or should other factors such as security and fraud prevention take precedence?

Cybercriminals have been a threat to the e-commerce landscape since the start of internet shopping. But, in the intervening years since the first online shoppers took to the web, customer awareness and education about security and fraud has also increased.

Lost in Transaction Vol I, an independent research study from Paysafe, reported that 49% of Americans said they thought the risk of fraud was an inevitable part of shopping online. This level of awareness is having very real consequences for user behavior: Eighty-one percent of respondents said they avoid shopping on unsecured and public Wi-Fi networks, a deliberate effort to minimize risk.

While a reassuring majority of those who experience fraud recover at least part of their losses, the experience often permanently damages their trust in the merchant they purchased from.

With new data breaches becoming public on an almost routine basis, it’s no surprise that our findings revealed that consumers are starting to favor safety over speed and ease of checkout.

Merchants typically view high cart abandonment rates as a sign that they should remove steps from the checkout process, and that convenience should take precedence over security. But while customers dislike friction, it turns out that they don’t dislike it enough to justify the trade-off: risk of fraud or data breach.

The contrast between the prevailing industry view and consumer attitudes is stark. Thirty-six percent of merchants fear customers won’t take well to fraud prevention measures that could impact convenience. But 58% of consumers are actually happy to accept whatever measures it takes to eliminate fraud, including two-step authentication.

Of course, this data doesn’t mean convenience should go out the window. If anything, it illustrates just how delicate the balance is that merchants must strike to succeed.

The tension between customer preference and the duty businesses have to protect their customers is a true struggle for modern merchants. Fifty-one percent of merchants expect credit card payments to continue to grow in popularity over the next two years, mainly in response to customer preferences. But, at the same time, 60% of merchants want to retire them, because they view them as the payment method that is most susceptible to fraud.

Traditional payment options aside, there is one area where customers and merchants can agree: cloud-based wallets, mobile wallets and alternative payments such as cryptocurrencies. Our research shows that these will continue making inroads into the mainstream. Customers expect them to become more widely available, and more merchants are introducing them, or planning to introduce them, in the coming years.

As alternative payment methods move beyond early adoption, new types of fraud will inevitably come into play. As things stand, the value of faster, more efficient fraud prevention isn’t in dispute. For 71% of respondents, it’s a top priority. And, eight in ten businesses intend to increase their anti-fraud budget by at least 10% in the next two years.

The challenge, then, lies in how to deploy these upgraded security measures in ways that are also cost-effective and have minimal impact on the customer checkout experience.

Biometrics, AI, geolocation and other emerging technologies will certainly help. However, they’re only one part of the equation.

Ultimately, fraud prevention must also inform merchants’ overall business strategy. Years from now, the most successful merchants will be those who understand that balancing security risks and ease of checkout are the building blocks of a long-lasting relationship with customers. The merchants who create a customer experience that’s simultaneously convenient and secure will drive brand loyalty and long-term customer trust.

Joseph Daly

Joseph Daly is COO of North American Payment Processing for Paysafe.