The global effect of fraud is causing consumers to lose trust in online payment transactions, research has revealed—with some cutting back on shopping and mobile banking.
Global card fraud stands at an estimated £17.07bn with merchants urgently needing to take steps in order to tackle the growing issue, according to MYPINPAD research on consumer trust in online and mobile commerce. In fact, more than £1.7m a day was lost to financial fraud across payment cards in the UK last year, with losses on card purchases made remotely, comprising £1m of this daily figure.
As a result, the survey shows that 67% of UK consumers are concerned about their online shopping and banking security, with almost a quarter of all respondents ‘very concerned’. And about a third (29%) of respondents have already been victims.
Another 61% stated that information about data breaches and fraud has impacted their trust of online shopping and banking—and some are taking action. About a fifth (11%) of respondents have shopped less and almost 10% said they do not use mobile devices to carry out transactions,. thanks to fraud concerns.
Only 2% of respondents believe speed is more important than security when completing an online transaction.
Smaller independent retailers are perceived to be the most vulnerable to online fraud.
50% would like the option to use a combination of card PIN and biometrics as a means of authentication an online transaction.
“The latest UK government figures show 90% of large businesses and 74% of SMEs have suffered a security breach,” said David Poole, business development director at MYPINPAD. “Increasing confidence is not just about preventing fraudulent transactions—it is also about boosting the number of successful transactions. There needs to be a consistent and convenient way for consumers to authenticate themselves for online transactions.”
When asked what online retailers could do to improve the trust consumers have in them, 40% of respondents said they would like to use cardholder PIN as a means of authenticating an online transaction. Half would like to use a combination of both PIN and biometrics.
“This research highlights the need for banks, retail, payment and card schemes to strike a better balance between user experience and security,” Poole added. “Consumers are well informed about the risks of transacting online and on mobile. For many, loyalty and a great experience entails peace of mind and tangible security. Multi-factor authentication and transparency around appropriate security practices are key to winning consumer trust.”
Interestingly, ease of use is fading as a priority in the face of security concerns. Overall, consumers do not believe transaction speed is more important than security—in fact only only 2% of respondents ranked speed as the top priority.