Security & Fraud

Consumers Committed To Online Shopping, Despite Strong Security Concerns

According to the 2016 American Express Digital Payments Security Survey, 70 percent of U.S. merchants are experiencing an increase in sales through digital channels, which is good news.

The not-so-good news? Those sales could be higher if payments fraud weren’t quite so prevalent a concern.

Nearly half — 48 percent — of consumers who shopped online in the past year have experienced payment fraud. That clocks in at about 80 million consumers. Another 40 percent view online shopping as basically riskier than in-store purchases, and 42 percent have abandoned a cart over a security issue. And that was just the average. Forty-eight percent of Gen X shoppers and 50 percent of millennials have dropped a cart over security concerns, showing the earliest adopters are also the most concerned with security.

On the merchant side, the data is less than wholly inspiring. Sixty percent had experience with online sales fraud, and 25 percent said that figure is on the incline. They also noted the abandonment problem — 31 percent of their transactions were abandoned before a sale was completed.

The good news is that consumers are willing to take an extra step for more security, including entering a CVV code, though only 57 percent of merchants ask for it. Consumers are also fairly open to creating online profiles — 63 percent — to make it easier to verify a purchase, though less than half of all merchants offer the option.

“Payment fraud can impact a merchant’s bottom line,” said Mike Matan, VP of industry engagement, product and marketing for American Express’ Global Network Business. “Fighting fraud for our cardmembers and merchants is an ongoing priority at American Express. We offer a number of services and features to help cardmembers monitor their account information and help prevent fraud at the point of sale, including one-click alerts to confirm charges via text, email and our mobile app. Our investments in technology and advanced analytics have also enabled American Express to achieve the lowest fraud rates in the industry.”

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Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

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