Fraud Fear Steers Shoppers Clear of Online
More than half the UK population still does not shop online, citing a range of reasons - from a simple preference for high street shopping to lack of a computer or internet access - including 41% who don’t shop online because of security concerns, according to a survey by CyberSource Ltd.
Online merchants surveyed rated only one issue above fraud as a threat to their businesses - the theft of customer data, writes Retailer Daily.
Merchants say fraud increased in 2008: Fraud losses now consume more than 1% of revenue for 37% of UK online merchants; fully 13% of them say they lose more than 5% of their revenue to fraud.
In today’s economic climate, such losses could entirely undermine online businesses’ viability, CyberSource points out.
Among all consumers surveyed (including those who shop online), 66% say they are concerned about the level of risk. About one-third of respondents say they or someone they know has been a victim of online credit-card fraud.
Merchants’ bottom lines have also been affected by expenditures for anti-fraud efforts. Support for MasterCard SecureCode and Verified by Visa has been the most popular step they took in 2008; more than 16% of merchantes said they have implemented each in the previous 12 months. Also, 15% have taken steps to analyze customer data to find signs of fraud.
Consumers’ most common source of information about the safety of online shopping is stories in the media–which tend to focus on crimes or losses of credit-card information. Consumers also rely on friends and family for advice.
“The challenge to the industry is educating consumers to shop safely, to minimize their exposure to fraud,” said Simon Stokes, managing director of CyberSource Ltd. “As more people gain access to the Internet and realize the convenience, value, and safety of shopping online, I believe we’ll see a higher percentage trying and staying with this form of purchase.”
UK shoppers are taking some basic precautions to protect themselves from fraud when shopping online:
- 68% of online shoppers have now signed up for the MasterCard SecureCode or Verified by Visa programs, which provide password security for online credit card users.
- 57% use credit cards for the additional protection they offer.
- 86% look for the secure padlock icon on a website before proceeding with a purchase.
About the study: The CyberSource UK Online Fraud Report examines data from more than 150 merchants and 1,000 consumers. Now in its fifth annual edition, the report was compiled by market researchers Vanson Bourne and GfK NOP.