American Express has released is 2019 Digital Payments Survey, which found that payments fraud is still a pressing concern for American businesses. The vast majority (77 percent) of respondents indicated that they had experienced some form of fraud during the past year, with 69 percent reporting that fraud fallout placed a significant strain on company resources.
To that end, businesses are now spending a greater portion of their IT budget on payment security, largely to address a fraud problem that they perceive to be a bigger threat. Respondents estimated that 27 percent of online sales were fraudulent (up from 18 percent in last year’s survey), and generally admitted that their payments infrastructure was vulnerable to fraud across digital and in-person channels.
Unfortunately, the rising rate of fraud coincides with consumer demands for greater convenience at the checkout counter. While consumers are worried about data security, they are also likely to abandon a purchase if the process takes to long, with 85 percent reporting that they have left items sitting in the cart in an online store.
“The findings about the battle between convenience and security are striking,” said American Express Executive VP Jaromir Divilek. “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.”
In that regard, EMV Secure Remote Commerce is expected to be particularly transformative because it will allow online merchants to streamline their payments process for collecting the personal information of their customers, which would be a major security concern for large and small businesses alike. Seventy-six percent of businesses indicated that they would prefer not to store people’s personal data, and similar numbers were willing to embrace biometrics and tokenization as security solutions.
The American Express report lends credence to a recent LexisNexis Risk Solutions report that found that fraud is having a bigger impact on financial institutions. A separate survey also found that payments professionals are increasingly worried about cybersecurity in the space.