Consumer confidence with e-payments affected by fear of fraud

Fraud losses are a significant issue in the payments space, with recent estimates placing total UK fraud losses from cards, remote banking, and cheques at GBP 768.8 million in 2016. However, consumers in almost all global markets are far more afraid of online card fraud happening to them than the statistical reality of it actually occurring. This ‘fear of loss’ is having a dramatic effect on consumer confidence and engagement with electronic payments.

The company’s ‘Consumer Payments Insight Survey, 2016’, reveals that online card fraud is rare among consumers globally, with only 2% of survey respondents in the US having been the victim of this type of fraud in 2016. However, almost two thirds of respondents in the US reported being worried about online card fraud. Conversely, in China – where the online card fraud rate is a tenth of the rate in the US (0.2%) – 85% of consumers reported being worried about this type of fraud.

The survey also confirms that consumers are very concerned about what would happen to their money if they lost a smartphone with a mobile wallet app. This prevents many consumers from signing up for these apps. Some even express unease with contactless card technology because they are worried about the card being stolen and used by fraudsters who do not need to know their PIN to use the card.

It is not enough to simply have a secure tool; consumers must know that their tool is secure – and telling them about security features only goes so far.