14th September, London - A study by Paypoint
has found that online sales risk being hampered because retailers lack the right security measures. It also reveals one in three consumers shop online less because of concerns over fraud.
The study, conducted by the Centre for Economic and Business Research (Cebr) on behalf of PayPoint.net, forecasts an 18% rise in fraud over the next four years as shopping through new mobile and social media channels increases and opportunistic fraudsters take advantage of their infancy.
Further research from the online payments provider
revealed 70 per cent of retailers said they expect the adoption of new e-commerce channels, such as mobile commerce and social network commerce, to result in increased levels of fraud. Whilst this indicates that the majority of online retailers are aware of the risks, just 39 per cent said they have an adequate plan in place to tackle it.
The risk of fraud remains a concern for consumers; the PayPoint.net study, ‘Gangsters’ Paradise or Shoppers’ Delight?’
, found that one in three (34.5 per cent) consumers said they would make fewer purchases online because of their concerns about online fraud. Four in 10 also said they have either been a victim of card fraud, or know someone that has.
Scott Corfe, economist at Centre for Economics and Business Research comments: “There is clear evidence that the risk of fraud keeps the value of online retail sales structurally lower than would otherwise be the case. As the use of mobile phones and social networks continues to grow retailers can benefit by guaranteeing their online security and providing safe payment mechanisms which will win over consumers and lead to higher retail sales.”
In 2009 fraud screening detection tools saved up to £38.9 million and fraud fell by 16%, demonstrating that retailers have made steps to combat fraud. This fell a further 4% in 2010, which can be attributed to better fraud protection
systems being in place such as Verified by Visa and MasterCard SecureCode. However, retailers are less prepared when it comes to new channels such as mobile and social media and this will see e-commerce fraud boosted by £30million by 2015.
Michael Norton, Managing Director of PayPoint.net, comments: “Whilst retailers have made good headway in tackling fraud over the last few years they’re now on the back foot when it comes to new shopping channels because many haven’t planned ahead. Consumers are well aware of the risks of online fraud and will penalise websites which do not have obvious fraud protection mechanisms in place. By providing safe payments and committing to fast resolution of any disputes, retailers can capitalise on the adoption of new shopping avenues and in turn win over customers and gain their trust. The ability to track and analyse transactions in real-time will be critical.”
Tamara Heber-Percy, Founder and CTO, Mr & Mrs Smith comments: “As we are developing our iPhone app, we wanted to be aware of the security threats that are often associated with mobile commerce and ensure that we addressed these risks so that customers would feel safe using the app. We are confident that we have stringent enough fraud protection measures in place for our customers to benefit from a secure mobile offering and for us to benefit from these new revenues. ”
More information on the findings of the study, and advice for retailers on how they can embrace these new shopping channels while eliminating the potential fraud risk, can be found in the full report: http://www.paypoint.net/new-payments-report.
Karla Winch / Katie Buckett
020 7592 1200
NOTES TO EDITORS About the research
The Centre for Economics and Business Research analysed the future of internet retail sales and its impact on e-commerce fraud in the UK in May and June 2011. The report uses data from the Office for National Statistics, Financial Fraud Action UK and an Opinion Matters survey of 2,000 consumers, especially commissioned by PayPoint.net.
PayPoint.net conducted additional research amongst 119 of its customers between 9th June and 20th June 2011. About PayPoint.net PayPoint.net
is a tier one internet payment service provider
that helps businesses take advantage of the opportunities, and manage the risks, of trading online. Drawing on its 13-year heritage in online payments
, it provides a highly secure payment platform and FraudGuard, one of the most advanced online fraud management systems on the market.
Its customers span high-profile retail brands such as WHSmith, Links of London and Firebox.com, small businesses and start-ups, for which it can arrange all the facilities needed to trade online in just 24 hours.
PayPoint.net is certified to the highest level of the Payment Card Industry Data Security Standard (PCI DSS)
, offering all its customers compliance by default. Additionally, it has links with all multiple acquiring banks and accepts all major payment cards and online payment schemes.