For over half of online businesses (55%) an increased risk of fraudulent payment transactions has been one of the greatest concerns during the Covid-19 pandemic. That’s according to international research from specialised payments platform Paysafe which indicated that concerns around fraud are more front of mind for businesses than ever after an unprecedented year.
The survey also found that businesses feel the same concern is reflected among their customers. 60% of online businesses believe consumers are more concerned than ever about being a victim of fraud following Covid-19 and 76% have already noticed a change in the way their customers are making payments. When asked why, the highest number of respondents (40%) said they felt that consumers are looking for a more secure payment method.
The findings form part of Paysafe’s most recent addition to its ‘Lost in Transaction’ research report series – How Covid-19 has reshaped the SMB checkout- in which 1,100 small to medium-sized enterprises (SMEs) globally which operate online were asked about the effects of Covid-19 on their business.
The importance of security as a key criteria for businesses when it comes to accepting online payment was also highlighted as a key trend in Paysafe’s research from 2018 and 2019, and despite an unprecedented year of new challenges it remains the primary payments concern for businesses. With 44% of respondents placing it in their top three most important factors to consider when evaluating a payments provider, security was ranked as higher priority than reliability (36%), cost (34%), and ease of integration (22%). Yet the solutions aren’t necessarily straightforward – 58% reported that they find it hard to strike a balance between improving security processes and making the online customer journey as quick and easy as possible.
Danny Chazonoff, Chief Operating Officer at Paysafe, said: “Protecting ourselves from fraud has long been reported as a concern among businesses and consumers, but our research shows that security has become more of a priority than ever, and there are a few reasons for this. The economic impact of Covid-19 has led to a natural desire from both consumers and businesses to protect their finances. Coupled with that, we know that criminal activity such as fraud historically rises during national and global crises, and this pandemic has been no exception.”
Paysafe research among 8,000 consumers conducted in April this year highlighted that protection against loss from fraud (34%) and keeping financial data safe from fraudsters (32%) were the two main reasons for consumers to choose a payment method. Over half of consumers (51%) said they would accept any security measure if it kept their data secure, however poor it made the user experience, and 25% said they would accept more inconvenience than they currently experience.
Chazonoff added: “We’re also seeing more consumers than ever shopping online, given shielding, lockdown restrictions and less desire to leave the house. The 18% of consumers who told us they’d shopped online for the first time following the initial lockdown may have concerns around trying new payment methods. Other consumers who are perhaps already used to shopping online might be interacting with new businesses which they’re unfamiliar with, affecting their willingness to share financial details. For online businesses which want to attract and retain customers from these two groups offering greater choice at the checkout will be essential.”