Riskified eConficence survey:
online fraud and its effect on consumers’ trust
November 17, 2021
Riskified, an eCommerce and fraud-prevention solutions provider, conducted a study in march 2021 in which 4,000 consumers and 400 retailers participated across the US as well as European countries such as Germany, France, and the UK. The data presented in the eConfidence benchmark survey revealed a disconnect between retailers and shoppers when it comes to online fraud, highlighting how incredibly widespread online retail fraud has become, and the financial impact this has resulted in.
In the UK, 82% of retailers said that they have seen an increase in fraud attempts since the pandemic began. Card Not Present (CNP) fraud having the biggest negative impact on revenues (60%) followed by Promo Abuse (48%).
26% of global retailers revealed fraud is significantly affecting their businesses’ profitability, and 34% said they had lost a significant amount of eCommerce revenue to fraud in the year 2020.
The Disconnect Between Consumer and Retailer
Riskified also revealed there is some over-confidence among retailers.55% stated they are prepared to prevent online fraud, however, 34% of consumers revealed they distrust said retailers and their ability to prevent fraud.
27% of UK online consumers surveyed revealed their concerns over online shopping continues to grow, and 51% said they believe online fraud will be even more rampant in the following year; UK consumers would even go as far as blaming the retailer for compromised accounts and 67% said they would not shop from a retailer where their account was previously compromised. This results in long-term brand impact and it permanently damages retailers revenue.
Fraud Prevention and its Impact
The survey revealed the most effective tool to prevent fraud is also one of the most damaging to revenue in several countries; the UK and France revealed two-factor authentication had the most damaging effect in their markets, and the US and Germany ranked it as the second most damaging tool to prevent fraud, largely due to the friction it has on consumer experience.
Fortunately, new technologies are constantly being developed in order to prevent online fraud and reduce its effect on consumer experience.
Fraud presents challenges for retailers who want to protect businesses while also delivering a seamless and safe experience for shoppers. According to Juniper Research, retailers lost £12.3 billion to eCommerce fraud in 2020. That number is expected to exceed £18 billion in just three years. By continuously learning from our retailer network and feeding real-time data into our sophisticated machine learning platform. We are able to help our retail partners build trust and confidence in the online shopping experience.
As online shopping becomes more prevalent, so does online fraud. In order to protect your business and customers, you can keep informed of the new up-and-coming technologies that are being tailored to prevent fraud and reduce friction among consumers and retailers with AltoGlobal.
Want to learn more? Check out Enterprise Times’ full write-up of the Riskified Survey here.
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