Nearly eight in ten US merchants have experienced some form of fraud since they started their operations, according to the latest American Express research survey.
Furthermore, 69% of those partaking in the study stated they have seen a significant increase in the company time and expense dedicated to handling payment fraud.
The 2019 American Express Digital Payments Survey received the opinions of 1,004 consumers and 400 companies within the space.
US merchants expect an average of 27% of their annual online sales to be fraudulent transactions, a significant rise from the 18% reported in last year’s study. Fear is clearly rising among merchants and fraud. The respondents stated they see their systems as more vulnerable as last year, including mobile transactions (82%, up from 73% in 2018), their website (79%, up from 74% in 2018), and point-of-sale payments (66%, up from 55% in 2018).
Around 42% of the consumers to take part in the survey said they had experienced a fraudulent attempt to use their credit card or similar payment information. Additionally, 59% claimed they are worried their payment account will be compromised when making an online transaction.
Merchants are picking up on the discomfort. The companies reported an average spend of 33% of their IT budget was put into payment data security, rising from 27% last year.
Despite the dears, consumers do not want this impacting the time it takes to pay. Of the respondents 82% claimed to have left a transaction due to it taking too long.
To help speed up future transactions, some merchants store customer profiles and card payment information. Of those to take part in the survey, 55% stated they do this and a further 22% claimed to be implementing it within the next 12 months.
However, merchants are incorporating this service begrudgingly. Around 76% stated they would rather not hold onto the data as it adds to costs and security concerns. American Express stated that with the arrival of Secure Remote Commerce (SRC) will ease these burdens by removing the need of merchants storing personal payment information.
American Express executive vice president Jaromir Divilek said, “The 2019 Digital Payments Survey shines a light on the most pressing needs for our merchants and customers, and the findings about the battle between convenience and security are striking,
“We’re always looking to better understand our customers and their everyday challenges, and the survey points to a real need for emerging payments innovation to improve the online and in-store checkout experience. We believe that Secure Remote Commerce for digital checkout and contactless payments for in-person checkout will be significant improvements for both merchants and consumers in the U.S.”
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