Fraud involving stolen login credentials points to the issues with traditional password-based security. However, consumers have password fatigue and hate cumbersome multi-step logins. These security “improvements” often lead to frustration or even abandoned transactions. Financial institutions (FIs) recognize these pain points, but many existing solutions — such as one-time passcodes — add complexity without solving the issue.
Tap-to-authenticate metal payment cards present a simpler, more secure alternative by combining the durability of physical passkeys with digital authentication. However, consumer awareness of this new approach remains limited. Strong interest from financial institutions and consumers alike means that this could all be about to change.
“Consumers Struggle with Passwords and Fraud — Metal Payment Cards Offer a Smarter Alternative” is a PYMNTS Intelligence and Arculus by CompoSecure collaboration. This edition examines how financial institutions address rising fraud rates and adapt authentication methods to improve security and customer trust. It draws on insights from a survey of 200 respondents, consisting of heads of fraud and product leaders from FIs with assets of more than $1 billion, conducted from June 16, 2024, to July 2, 2024.
Consumers Face Growing Authentication Challenges
Authentication gaps expose consumers to rising fraud risks.
Fraud driven by stolen or falsified credentials remains the top authentication-related threat, accounting for 41% of cases. Vulnerability on this level spotlights the limitations of password-based security. Such traditional methods expose consumers to account takeovers, fraudulent transactions and data breaches.
Banks report that 65% of consumers struggle to remember passwords. Because of this, many consumers engage in weak security practices such as reusing credentials or choosing simple, easily guessed passwords. These behaviors make it easier for cybercriminals to exploit stolen login details, further increasing fraud risks. Frequent password resets also contribute to authentication fatigue, frustrating users and making some more likely to ignore the latest offerings in security best practices.
Adding to these risks, multi-step authentication measures can introduce unnecessary complexity. Extra security steps — such as SMS passcodes or email verification codes, neither entirely secure — slow transactions and increase customer frustration. These processes may also depend on internet access in spotty coverage areas to complete. When authentication processes become too cumbersome, users often bypass them entirely. This paints a problematic picture of security and trust in digital banking.
These frictions vary by institution type and size. Local banks and CUs report the highest average authentication time at 3.2 minutes, suggesting that smaller institutions may rely more on manual verification processes. Regional and large national banks report shorter authentication times, at 2.9 and 2.8 minutes, respectively.
Bank size also influences authentication efficiency. The smallest institutions — those with $1 billion to $5 billion in assets — report the longest authentication times, at 3.5 minutes. Data suggests that mid-sized banks may struggle to balance security with ease of use. In contrast, the largest banks — those with more than $100 billion in assets — report the shortest authentication times, at 2.7 minutes. This performance reflects the technological edge of larger institutions, albeit one of seconds.
Metal Payment Cards Offer a Simpler and More Secure Solution
Consumers see tap-to-authenticate metal payment cards as a better solution to current authentication practices.
Banks increasingly view tap-to-authenticate metal payment cards as a frictionless, high-security alternative to passwords and traditional multi-factor authentication. On average, financial institutions in our study identified five distinct advantages of metal authentication cards over conventional security tools. In contrast, large FIs are even more confident in the technology. These FIs cited six key benefits on average.
The overall results confirm that most banks believe consumers prefer tap-to-authenticate metal authentication cards. These include:
- Frictionless authentication (58%): Faster and more intuitive than passwords or one-time passcodes.
- Premium benefits and perks (57%): Rewards, exclusivity and high-end aesthetics enhance the card’s appeal.
- Enhanced security (54%): Consumers perceive metal authentication cards as a safer alternative to traditional credentials.
Beyond these top advantages, banks recognize additional benefits:
- Durability and sustainability (53%): The long-lasting materials and eco-friendliness of the cards appeal to consumers.
- Multi-functionality (50%): A single card can secure payments, authentication and loyalty programs.
- Brand trust (46%): The card’s elegant, high-end design strengthens consumer trust.
Awareness and Education Are Key to Adoption
Overcoming awareness gaps can drive consumer adoption of metal payment cards.
Despite clear benefits, the lack of consumer awareness remains a significant barrier to adopting tap-to-authenticate metal cards. Nearly 2 in 3 (62%) banks identify general awareness issues as a key factor slowing adoption, as this is a new technology. Without stronger education efforts, many consumers may not fully understand the security and convenience benefits of these tap-to-authenticate metal payment cards.
FIs can take several steps to drive broader adoption, including:
- Framing tap-to-authenticate metal cards as a premium, user-friendly security solution. Positioning the cards as a secure yet easy-to-use authentication tool could boost interest.
- Prioritizing early rollouts to validate education and awareness messaging. Pilot programs can showcase real-world benefits and help FIs refine messaging.
- Targeting tech-savvy early adopters and premium cardholders. These consumers can serve as advocates, influencing broader market adoption.
Momentum for tap-to-authenticate metal cards is building among banks, with 77% of FIs considering solutions like tap-to-authenticate technology as a powerful new layer of security.
Banks and other FIs can position tap-to-authenticate metal cards as accessible next-generation security solutions. With most banks already expressing strong interest, FIs can use targeted awareness and other strategic rollouts to address consumer awareness gaps. Clear communication around benefits like the improved security of tap-to-authenticate metal cards and their ease of use and durability can help FIs expand adoption. Addressing these awareness gaps through clear education and strategic positioning will be critical to driving deeper mainstream adoption.
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Methodology
“Consumers Struggle with Passwords and Fraud — Metal Payment Cards Offer a Smarter Alternative” is based on a survey from June 16, 2024, to July 2, 2024. The report examines how FIs address rising fraud rates and adapt their authentication methods to improve security and customer trust. The survey included 200 heads of fraud and product leaders from FIs with assets of more than $1 billion. The sample provided insights into authentication challenges, customer friction and the adoption of advanced solutions such as tap-to-authenticate metal cards and passwordless authentication. Responses were analyzed to identify trends and preferences across banks of varying sizes and fraud exposure levels.
