Consumer Password Hassles Linked to Lost Revenue

A report released Tuesday by Transmit Security, an access and identity management company, derived from a survey of 600 U.S-based consumers 18 to 54 years old,Isays that online businesses are losing potential customers and substantial amounts of revenue because they’re dependent on traditional password systems and outdated customer authentication models.

Lost customers and revenues are caused by password sharing and friction created at websites by onerous authentication procedures.

Half of the responding consumers admitted sharing a password to at least one of their accounts; and 41 percent acknowledged they share their passwords often.

There are obvious losses of revenue from password sharing for subscription services, but there is a secondary impact on data collection. When multiple users are sharing an account, it dilutes the data and makes it less valuable.

If accounts are being shared by multiple users, service providers are less likely to accurately monitor usage and are unable to correctly personalize their offerings. Therefore, their user experiences can’t be personalized to meet the expectations of their users.

There are security concerns for a business as well.

If you’re sharing passwords, it’s difficult for the business to understand who they’re talking to or doing business with, isn’t it?  It makes it difficult to identify if someone is a true authorized user or somebody who has compromised the credentials.

If 65 percent of users reuse the same password across multiple accounts, the report noted, once users share that one password with someone else they are essentially handing over access to multiple accounts they own.

What is more, traditional password systems are having a negative impact on the shopping experience of many consumers.

According to the survey, two-thirds of users (66 percent) will leave a website if the registration process is too complex.

Nine out of 10 consumers (87.5 percent) told surveyors they’d been locked out of an online account after too many failed login attempts. 92 percent of users leave a website instead of recovering or resetting their login credentials.

Customers are dropping out of transaction processes — or failing to use a site at all — due to overly complicated, and oftentimes error-ridden password systems.

These horrible customer experiences are costing businesses an unimaginable amount of money.

The situation has gotten worse because of the number of digital applications and the number of devices using those applications.

Websites are also putting more restrictions on password selection, making it harder for users to come up with passwords they can remember.

Consumers want a frictionless, fast and easy online experience. Passwords are one of the leading reasons for cart abandonment.

Besides, 2FA and Captcha are indeed a source for dissatisfaction, as they add stress to the login and sign-up processes.

Eliminating passwords is a grand goal but it’s still a distant one at this stage.

A more pragmatic approach is to reduce abuse of passwords which are leaked to ensure that those passwords are only ever used alongside a second independent factor.