My colleague and I, both payments experts, find that we disagree about the safest way to buy things online. Without getting into the details, it all comes down to whom we trust. We’ve got the facts, which we combine with our perceptions and experiences. Then, we come to different conclusions about what we trust most.
It makes sense that our ideas about trust differ because trust is such an amorphous concept. At the same time, trust is essential for human relationships and for government and commercial enterprises. Trust underpins optimism, willingness to take a chance, belief in another’s good intentions. Trust underpins payments. In The Story of Payments, Rich Oliver and George Warfel Jr. write, “Trust is at the heart of payments, whether the payment instrument being trusted is a dollar bill, a check, or a mobile phone text message.”
You probably know that trust in government and businesses generally has declined
over the last 50 years. And trust in financial institutions goes up and down with the economy. For example, confidence in banks dropped around 2009, with trust recovering since then. Trust also varies from one person to the next, with willingness to trust associated with income and demographic characteristics, including, age, race, and education, as well as unobservable personality differences.
Societal trends, the health of the economy, and each person’s characteristics are outside the control of a product designer creating a new user experience layer for a prepaid card or a fintech CEO seeking to establish a relationship with prospective customers. So how to build trust? One strategy—building familiarity—appears to encourage a trusting relationship between payments provider and customer, between payee and payer. Among survey respondents who called financial institutions untrustworthy in a 2021 survey, lack of familiarity was a prime reason. The Federal Deposit Insurance Corporation (FDIC) in 2016 found similarly that
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