Consumers Willing to Take Additional Security Steps to Prevent Online Fraud as E-Commerce Grows, Finds New American Express S...
October 20 2016 - 8:30AM
Business Wire
Merchants Have Opportunity to Boost Online
Sales and Customer Trust
As e-commerce continues to expand, online payment security is a
top concern for merchants1 and consumers2, according to a new
report from American Express (NYSE: AXP). The 2016 American Express
Digital Payments Security Survey found that 70% of U.S. merchants
are experiencing 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, reveals that as ecommerce grows, payment security
remains top of mind for both. 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%). In addition, 42% of shoppers say that they
have abandoned an online purchase due to payment security concerns.
This increases 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.
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.
The good news is that consumers indicate they are willing to
take specific steps to enhance 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-in-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 70% of online consumers are
prepared to use security questions (e.g. ‘What was the make and
model of your first car?’), 43% of merchants have this prompt
available on their websites.
- More than two-thirds of online
consumers (68%) are willing to create a one-time password but 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 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. Yet, 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.
Consumers also can do more to keep their personal information
secure online. Less than half (44%) use a different password for
every online account; 30% change their passwords once or twice a
year; and 17% never change their banking or payment passwords.
American Express recommends Card Members create different passwords
across all banking, email and social media accounts and consider
updating all passwords every six to 12 months.
“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.”
American Express works with merchants to fight online fraud on
multiple fronts, including:
- SafeKey®: To further
enable U.S. merchants to reduce online fraud, American Express
recently expanded availability of SafeKey, an authentication tool
that adds an extra layer of security when a participating American
Express Card Member shops online. Leveraging the global industry
standard, 3-D Secure®, SafeKey detects and reduces online fraud by
validating the Card Member’s identity through various methods,
including risk-based authentication and dynamic one-time
passcodes.
- Enhanced Authorization: American
Express’ Enhanced Authorization service uses additional information
submitted by online merchants, such as email addresses, phone
numbers, and shipping addresses, to detect fraud when a Card Member
transaction is submitted for authorization. The service can help
online merchants reduce operating expenses stemming from
chargebacks and capture more online sales.
- Accertify: A subsidiary of
American Express, Accertify provides fraud-management and
chargeback solutions to online merchants that help them detect and
prevent fraud across all payment card networks. Many of Accertify’s
clients have quickly achieved significant gains in the efficiency,
accuracy and productivity of their fraud-prevention efforts,
resulting in reductions in their fraud losses and customer
complaints related to fraud.
Survey Methodology
The 2016 American Express Digital Payments Security Survey was
conducted among U.S. consumers and merchants that offer
online/mobile payment options to their customers. The anonymous
survey was conducted online September 6-13, 2016.
Unless otherwise noted, responses among consumers represent
those who have made an online purchase three or more times in the
past 12 months based on self-report. The sample size of n=718 has a
margin of error of +/- 3.7 at the 95% confidence level. The
consumer portion of the study is based on an overall sample of
1,021 respondents weighted to be representative of the U.S. census
based upon gender, age, education, race and region.
The merchant portion of the study is based on a sample of 401
merchants in the U.S. Respondents have responsibility for making
decisions regarding customer payment options, IT/data security, or
online sales strategy and planning. The business sample has a
margin of error of +/- 4.9 at the 95% confidence level.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,
foursquare.com/americanexpress, linkedin.com/company/american-express,
twitter.com/americanexpress,
and youtube.com/americanexpress.
Key links to products and services: charge and credit cards,
business credit cards, Plenti rewards program, travel services,
gift cards, prepaid cards, merchant services, corporate card and
business travel.
1 Merchants refer to those businesses who accept payments on a
traditional website, mobile website or mobile application.
2 Consumers refer to those who have shopped online three or more
times in the past year
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161020005761/en/
American ExpressAndrew Johnson,
212-640-8610Andrew.R.Johnson@aexp.com
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