News • 27.08.2018

Is fraud inevitable when shopping online?

Two thirds of UK consumers think so but chose convenience anyway

The majority of UK consumers now accept the risk of fraud when shopping online as eCommerce shows no signs of slowing down, according to findings from Paysafe. Seven in 10 (70 percent) now prefer shopping online rather than going to physical stores, and a similar number (68 percent) shop online much more than they did a year ago.

Banknotes secured by a lock and a credit card with keys; copyright:...
Source: panthermedia.net / dedivan1923

This is despite almost two thirds (65 percent) of consumers accepting that a certain level of ecommerce fraud is ‘inevitable’ during the ecommerce process, up from 52 percent last year, underlining the increasing value consumers put on convenience.

One third (33 percent) of UK shoppers said they have experienced payment fraud in the past year, up 6 percent on 2017. This is perhaps symptomatic of merchants continuing to prioritise digital sales. Research from Ovum shows 58 percent of merchants place great value in reducing lost sales online compared to tackling fraud. Nearly half (48 percent) admitted they would accept a higher level of fraud in return for greater sales.

Preferred payment methods for customers

The report from global payments provider Paysafe also showed that when shopping online, 61 percent have used digital wallets in the past month, 34 percent have used a credit card, and 57 percent a debit card. Meanwhile, 51 percent are using in-app purchases more than a year ago, as the popularity of services such as Uber and Deliveroo change the traditional eCommerce payment process by retaining customers’ information for a seamless app experience. In fact, 79 percent now say they prefer to shop on a website that already has their payment information stored, highlighting that UK consumers place a premium on convenience.

Yet, data shows these attitudes do not translate to the realm of ‘frictionless’ payments – i.e. invisible transactions that take place ‘behind the scenes’ in apps – which are being held back by UK consumer concerns over security and data privacy, according to the findings. 52 percent of UK consumers cite fraud as the biggest barrier to using them; 43 percent express concerns around the use of their data, while two thirds (67 percent) think voice-activated systems are not secure.

What about cash payments?

And in spite of the popularity of eCommerce, cash continues to thrive as the most common form of payment: 88 percent of consumers used it in the past month to make a purchase. Although 62 percent of UK consumers carry less cash than they did a year ago, falling from an average of 33 pound last year to 21 pound in 2018, their relationship with cash is changing and there are other ways to keep it at the forefront of the payment mix.

For example, in Austria and Germany, online cash replacement systems which negate the need to share financial data are used by 12 percent and 9 percent of respondents respectively. Indeed, 67 percent of UK consumers said they feel more comfortable purchasing online via a payment option where their financial details are not shared. In North America, prepaid cards are the most popular cash alternative, used by 18 percent of Canadians and 16 percent of Americans respectively.

Biometric payment methods

Commenting on the research, Oscar Nieboer, Chief Marketing Officer, Paysafe Group, said: “UK consumers’ attitudes towards fraud in payments are largely defined by the medium of the transaction. In the UK, we have now reached a level of maturity in online retail – most websites are optimised, the checkout process is increasingly simple and delivery is getting quicker. In turn, more consumers are telling us they are accepting a level of fraud for this convenience. What is notable, though, is the same rules do not yet apply to biometrics, such as voice-activated payments. The idea of a consumer’s unique biometric data being defrauded is uncomfortable, and this manifests as emerging technology like voice not yet attracting mainstream usage for payments.”

These findings emerge as other regions are taking active steps to navigate the fraud landscape typically associated with online retail. Only 28 percent and 26 percent of German and Austrian consumers accept a level of fraud is inevitable, which is why pay by invoice is popular in these regions. 29 percent of Germans and 38 percent of Austrians have used this method, which circumnavigates the entry of payment details online, with offline verification and authentication replacing it.

“What the diversity of payment types in other regions shows is we shouldn’t simply accept fraud. We shouldn’t have to choose between risk and convenience, and in a time of hyper-awareness around data security and privacy, merchants must place a premium on securing customers’ data now more than ever,” said Nieboer.

Source: Paysafe

related articles:

popular articles:

Thumbnail-Photo: The global state of autonomous stores
18.12.2023   #Tech in Retail #self-checkout systems

The global state of autonomous stores

The stores are located in various retail segments such as food retail, fashion, electronics, convenience stores and fast food.

In a highly competitive global retail landscape, autonomous stores are an emerging force that addresses changing consumer behaviors, reduces operational costs, improves profitability, and powers revenue growth strategies. Advancements in autonomous ...

Thumbnail-Photo: Nedap teams with Foot Locker to extend RFID project...
05.10.2023   #omnichannel #software applications

Nedap teams with Foot Locker to extend RFID project

Foot Locker successfully matches supply and demand in newly opened stores in Eastern Europe using RFID technology

Nedap the global leader in RFID solutions, announces that multi-brand sports fashion and apparel retailer Foot Locker has successfully extended Nedap iD Cloud to its new, Eastern European stores. The objective is to offer the best possible ...

Thumbnail-Photo: EuroCIS 2024: Go beyond today!
16.10.2023   #retail #Tech in Retail

EuroCIS 2024: Go beyond today!

27 to 29 February 2024 will see the Who’s Who of Europe’s retail technology sector meet in Düsseldorf

Go beyond today! EuroCIS at the end of February will once again show solutions and products for the retail of the future @Messe DüsseldorfIn late February, numerous companies will again exhibit solutions and products for retailers to shape and ...

Thumbnail-Photo: Unified Commerce Platform in focus
24.10.2023   #omnichannel #software developement

Unified Commerce Platform in focus

Handover at REMIRA: Dirk Bingler supersedes Stephan Unser as CEO

REMIRA is setting the course for future development of the company: On November 1, Dirk Bingler (48) will become the new CEO of the supply chain and omnichannel software expert headquartered in Dortmund. The previous CEO Stephan Unser (62) moves to ...

Thumbnail-Photo: Out of Stock in Retail and innovative solutions to avoid them...
07.11.2023   #brick and mortar retail #customer satisfaction

Out of Stock in Retail and innovative solutions to avoid them

Due to various events, the availability of goods in retail will be increasingly restricted from 2022, with the result that customers cannot find in food retail the products they wish to buy, because those products are sold out, are temporarily ...

Thumbnail-Photo: SES-imagotag becomes VusionGroup
29.01.2024   #software applications #artificial intelligence

SES-imagotag becomes VusionGroup

A new identity highlighting the broader portfolio of innovative solutions
developed by the Group to solve the major challenges of physical commerce

SES-imagotag (Euronext: SESL, FR0010282822), the global leader in digital solutions for physical commerce, today announced that it has changed its name to VusionGroup. This new name embodies the various product lines and solutions that have enhanced ...

Thumbnail-Photo: Payment as a success factor: more than just paying...
15.01.2024   #Tech in Retail #payment systems

Payment as a success factor: more than just paying

Flashback to 1994: databases and ERP systems, first commercial websites, mobile phones with colour displays, CD-ROMs, Java as a programming language ...

Thumbnail-Photo: Trigo and Netto Announce Autonomous Supermarket with Real-Time Receipt...
24.01.2024   #Tech in Retail #artificial intelligence

Trigo and Netto Announce Autonomous Supermarket with Real-Time Receipt Capability.

‘Final step’ in frictionless shopping drives trust by enabling consumers to view their receipts BEFORE leaving the store
Full size 800m2 grocery supermarket powered by computer vision AI is Europe’s largest retrofitted frictionless store

Trigo, a leading provider of AI computer vision technology that transforms traditional brick-and-mortar retail outlets into digital smart stores, and discount supermarket chain Netto Marken-Discount (also known as Netto), have partnered to launch ...

Thumbnail-Photo: Tesco to introduce new scan-free technology on self-service tills at...
03.01.2024   #brick and mortar retail #Tech in Retail

Tesco to introduce new scan-free technology on self-service tills at GetGo store

Seamless Shopping Revolution: Tesco Tests Scan-Free Technology in London

Tesco is trialling an exciting new technology innovation that means customers don’t need to scan their items ...

Thumbnail-Photo: MPREIS Transforms Operations with Zebra Workcloud Task Management™...
06.11.2023   #customer experience #software developement

MPREIS Transforms Operations with Zebra Workcloud Task Management™ Software Solution

Austrian food retailer to streamline communication in around 300 stores to improve staff engagement, inventory optimisation, and customer satisfaction

MPREIS has around 300 Austrian stores in regions across Tyrol...

Supplier

VusionGroup SA
VusionGroup SA
55 place Nelson Mandela
90000 Nanterre
Zebra Technologies Germany GmbH
Zebra Technologies Germany GmbH
Ernst-Dietrich-Platz 2
40882 Ratingen
Captana GmbH
Captana GmbH
Bundesstraße 16
77955 Ettenheim
Innovative Technology Ltd.
Innovative Technology Ltd.
Innovative Business Park
OL1 4EQ Oldham
REMIRA Group GmbH
REMIRA Group GmbH
Phoenixplatz 2
44263 Dortmund