Cost-of-living crisis exacerbates consumer fears of online fraud
Nearly half (49 per cent) of UK consumers have become more concerned about becoming a victim of online fraud now than they were in 2021, according to payments firm Paysafe.
Research released by the platform indicates that UK consumers are increasingly prioritising financial security over convenience when making online transactions.
The research revealed that 60 per cent of people in the UK are so concerned about fraud that they feel it is an inevitable risk of online shopping, a major rise from the 45 per cent who said the same in 2021.
These fears have caused 49 per cent to not feel comfortable entering their financial data online to pay for goods and services, another increase from 38 per cent in 2021.
According to the latest report from Money.co.uk, fraud victims in the UK saw an average loss of £7,000 to online criminals in 2021.
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The payments industry has always struggled to balance security and convenience for customer satisfaction but growing concerns around fraud have raised security up the agenda.
Nearly twice as many consumers chose security (47 per cent) over convenience (24 per cent) as the most important factor when paying for an online purchase.
More than a third of respondents (41 per cent) said they trust passwords more than biometric authentication methods, a 6 per cent increase from 2021.
However, confidence in biometric authentication is also growing, with 53 per cent agreeing biometric authentication makes online payments more secure, a rise from 45 per cent last year.
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With fraud concerns clearly at the top of the agenda for consumers, merchants that offer multi-factor authentication methods may instil greater confidence in consumers.
Despite all these concerns, more than half (55 per cent) said payments are more secure than they were a year ago. And 50 per cent are satisfied with the current balance between security and convenience, which is in stark contrast to 2021, when only 24 per cent were satisfied.
But the amount of trust merchants enjoy is dependent on the sums of money involved. While 75 per cent said they felt comfortable buying from a peer-to-peer platform and 54 per cent from an online retailer like Amazon, this is only if the item costs no more than £150.
For amounts exceeding £1,500, confidence is low across the board, suggesting there is still work to do in highlighting the benefits of alternative payment and security methods.
“It’s been well-observed that during times of financial crisis, fraud rates rise,” said Chirag Patel, president digital wallets at Paysafe.
“It happened during the height of the pandemic, and now, as we enter a recession in the UK, consumers are right to be alert to the dangers in the online payments world. Respecting customers’ concerns is paramount, however striking the right balance for convenient everyday use remains critical to retain customers.”
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