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Online fraud fears grow following ‘cost-of-living crisis’

Online fraud fears grow following ‘cost-of-living crisis’

Nearly half (49%) of UK consumers are more concerned about becoming a victim of fraud now than they were in 2021.

That’s according to research released by Paysafe, which indicates that UK consumers are prioritising security over convenience when making online purchases, as the impact of the cost of living crisis continues to fuel financial worries for UK households.

The research goes on to say that 60% of people in the UK are so concerned about fraud they feel it is simply an inevitable risk of online shopping, a major jump from the 45% who said the same in 2021.

These fears have caused 49% to not feel comfortable entering their financial data online to pay for goods and services, another jump over the 38% who felt this way in 2021.

According to the latest Fraud report from Money.co.uk, in Q4 2021, there were a total of 95,124 reported cases of fraud and cybercrime in the UK, resulting in £635.3 million in losses overall – that works out as nearly £7,000 lost per victim on average.

There were 137,695 crimes reported between January 2021 to March 2021 with losses totalling £625.6 million. In Q2 the number of crimes fell 15% (116,042 reported crimes) with reported losses falling by £75.8 million.

Q3 had a 19% decrease in reports however, losses were greater (£585 million) and Q4 saw the greatest amount lost at £653.3 million reported in the final three months of the year.

As UK consumers prepare for the highest gas price jump in history, it’s clear that losses of this amount would be even more impactful for victims.

For years the payments industry has struggled to balance the competing needs of security and convenience for customer satisfaction, and having a streamlined customer experience remains essential, but growing concerns around fraud have put security into the spotlight.

Nearly twice as many consumers chose security (47%) over convenience (24%) as the most important factor when paying for an online purchase.

Although security experts often discuss the limitations of password protection, consumers are now rallying behind the password as a familiar means of security.

Over a third (41%) said they trust passwords more than biometric authentication methods (a 6% uptick over 2021). That said, confidence in biometric authentication is also growing with 53% agreeing biometric authentication makes online payments more secure, a noticeable increase against 45% last year.

With fraud concerns clearly at the top of the agenda for consumers, merchants that offer multi-factor authentication methods can instil confidence in consumers that their transactions are secure.

Despite all these concerns, a majority (55%) of consumers think payments are more secure than they were a year ago. And 50% of respondents are satisfied with the current balance between security and convenience, which is in stark contrast to 2021, when only 24% were satisfied.

But the amount of trust merchants enjoy is dependent on the amount involved. While 75% currently say they feel comfortable buying from a peer-to-peer platform and 54% from an online retailer like Amazon, this is only the case if the item costs no more than £150.

For amounts over £1,500, confidence is low across the board, suggesting there is still work to do for merchants in highlighting the benefits of alternative payment and security methods within the industry.

 

The post Online fraud fears grow following ‘cost-of-living crisis’ appeared first on Payments Cards & Mobile.

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