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For any marketer, brand loyalty is the ultimate goal from any customer. But when consumers believe there is a growing threat from online fraud, they will take any measures to protect their privacy, according to a new report from American Express.
Online payment security is a top concern for merchants1and consumers, according to the 2016 American Express Digital Payments Security Survey, which revealed that 70% of U.S. merchants experienced an increase in sales through online and mobile channels over the previous year.
The report, which surveyed 1,021 U.S. consumers and 401 merchants, shows that nearly half (48%) of consumers who shopped online in the past year have experienced payment fraud, representing nearly 80 million online consumers. Four in 10 consumers (40%) view online shopping as having more risk than an in-store purchase (28%).
What’s more, 42% of shoppers say that they have abandoned an online purchase due to payment security concerns−a figure that rises to 48% for Gen X and 50% for Millennials, suggesting that while younger consumers are considered early adopters of new technology, they also place a high priority on the security of their information, the report says.
Meanwhile, 60% of merchants report that they have experienced fraudulent online sales, and 25% say their level of fraud with online sales has increased this year. Participating merchants reported on average 31% of their online sales transactions in the past year were abandoned by their customers before a sale was completed.
On the bright side, consumers indicate they are willing to take specific steps to elevate the security of their information when making an online purchase, presenting an opportunity for merchants to capture more online sales and increase trust among their customers.
Nearly eight out of 10 online consumers (78%) are willing to enter a security code (CVV) for their credit card, but only 57% of merchants require the use of a CVV code for online customer transactions.
While more than two-thirds of online consumers (68%) are willing to create a one-time password, only 37% of merchants require a separate one-time password for additional security; 63% of online consumers are open to creating a customer profile on the merchant’s website in order to complete a purchase, but less than half of merchants (46%) provide this option online.
For consumers, the report says, it boils down to trust.
For consumers to trust an online merchant, 84% want easy-to-find customer service contact information and 78% want visible security cues on the merchant’s site. But, only 50% of merchants say they provide easy access to customer service reps on their websites and 52% report taking the step of using data encryption on their website.
“Payment fraud can impact a merchant’s bottom line,” said Mike Matan, Vice President, Industry Engagement, Product and Marketing for American Express’ Global Network Business. “Fighting fraud for our Card Members and merchants is an ongoing priority at American Express. We offer a number of services and features to help Card Members 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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