Consumers Willing To Take Extra Steps To Avoid Online Fraud, an AmEx Survey Says

By Kevin Woodward
@DTPaymentNews

Consumers appear willing to take more steps to mitigate their online-fraud exposure than merchants are willing to provide, with 78% of consumers willing to enter a card-verification code, but only 57% of merchants requiring it, finds a new American Express Co. survey.

Consumers are willing to take other steps, too, according to the 2016 American Express Digital Payments Security Survey. Seventy-three percent of consumers would verify their billing addresses, but only 47% of merchants require this. Though only 43% of merchants require security questions, 70% of consumers are willing to answer them. Sixty-eight percent of consumers are willing to use one-time passwords, but only 37% of merchants use that technology.

The gap is narrowest on the question of building a customer profile, with 63% of consumers willing to do that and 46% of merchant requiring it.

The results are noteworthy because online commerce continues to grow. In the second quarter, U.S. e-commerce sales, according to the U.S. Department of Commerce, totaled $97.3 billion, a 4.5% increase from the first quarter and a 15.8% increase from the 2015 second quarter. Additionally, retailers are contending with a shift in criminal focus from the point of sale, where the EMV migration is making it tougher to use counterfeit credit and debit cards, to easier targets, such as online shopping.

Of consumers who shopped online in the past year, 48% experienced payment fraud and 60% of merchants had fraudulent online sales.

Indeed, the survey of more than 700 consumers found that 40% of consumers view online shopping as high risk, in comparison to 28% who have a similar view of the risk on an in-store purchase when not using cash.

“Security is top of mind for merchants and consumers,” Mike Matan, AmEx vice president of industry engagement, product and marketing, tells Digital Transactions News. “In this rapidly growing space, it’s clear that consumers are willing to take extra steps to keep their purchases secure.”

AmEx this month launched in the United States its SafeKey authentication tool, which is built on 3-D Secure technology. Merchants that use SafeKey share additional data about the customer, such as an email address, that AmEx can evaluate for transaction authorization. AmEx can also require a one-time password if necessary.

“Shoppers are conscious about online security,” Matan says. There are some steps merchants can take to build consumer trust. Eighty-four percent say providing easy-to-find customer contact information builds trust, as does including visible security cues, 78%; sharing regular order status updates, 84%; and having easy return policies, 83%.

Such concerns can have an effect on sales. Many shoppers—42%—abandoned a shopping cart because of payment-security concerns. Younger consumers are even more prone to that concern: 50% of Millennials and 48% of Generation X members have quit shopping carts because of it.