Online retailers believe payment fraud threatens business growth
And 60 per cent of Online Retailers do not know if they are currently PCI DSS compliant
Whilst 75% of online retailers will invest to grow their businesses this year, over two thirds still feel threatened by payment fraud, a survey from Sage Pay has shown. This, together with an increasing trend in consumer fraud concerns, will have a defining impact on the future of online retail in the UK. The findings make grim reading for businesses that intend to cash in on the high street exodus as they express an increasing desire to invest and develop their online retail presence.
According to the research, an overwhelming majority of respondents (68%) admitted that online payment fraud remains one of the most daunting elements of running an online business. Yet despite these fears, only a small proportion of the 1,000 respondents could demonstrate a clear understanding of the financial risks and implications associated with conducting business online. Indeed, 60% of online retailers do not know whether they are Payment Card Industry Data Security Standard (PCI DSS) compliant.
“Payment fraud poses a significant threat to online retailers in the UK,” said Simon Black, Managing Director, Sage Pay. “Online retailers have become adept at driving traffic to their websites but there is still a significant knowledge gap when it comes to understanding and implementing payment security. However, where retailers adopt the recommendations of PCI DSS, fraud screening and schemes such as Verified by Visa and MasterCard SecureCode, shopping online poses no more risk than payments made on the high street.
“Although (PCI DSS) compliance has existed since December 2004, our latest research suggests that just over one third (39%) of online retailers actually understand the definition of PCI DSS compliance, while 65% of respondents do not believe that they are personally responsible for covering the implications of payments fraud committed on their site.”
Black added, “PCI DSS compliance applies to all organisations that hold, process, or pass on cardholder information and it has significantly reduced the impact of credit card payment fraud within the UK.”
In 2008, the value of international internet payment fraud was valued at almost US$7bn(1). With an overwhelming majority (75%) of survey respondents expressing an intention to invest in their business throughout 2009, it is imperative therefore, that they recognise the scale of this threat and take practical steps to combat it and avoid inadvertently restricting future growth.
“Over the past six months we’ve registered an increase in online transactions year on year, despite the economic downturn, so there is clearly an increasing appetite for UK consumers shopping online. However, in order to persuade consumers to broaden their shopping habits it’s essential that retailers demonstrate the importance of online payment protection by taking a series of straightforward steps to protect themselves and their customers,” said Black.
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