E-Commerce May be Booming But So Is Fear of Fraud
Spurred by the pandemic, e-commerce took off like a ball leaving the bat of Mike Trout. Unfortunately, so has consumer anxiety about fraud.
According to a new survey by Marqeta, a global modern card issuing platform, consumer anxiety has seen a “considerable spike” since the pandemic drove consumers online en masse to make purchases via digital payments. The Oakland, Calif.-based company surveyed 2,000 consumers across the United States and United Kingdom about their experiences and attitudes toward payment fraud and how they felt about the threat of fraud in the aftermath of COVID-19.
With four out of five people surveyed saying they increased the amount they shop online during COVID-19, survey results show they are also feeling more susceptible to fraud. Consider:
• 65% of all consumers surveyed said they are more concerned about fraud since COVID-19.
• 67% of all consumers surveyed said they think shopping online more during COVID-19 has put them at a higher risk of fraud.
• 58% said they think the risk of fraud makes them less likely to try new forms of payment.
Marqeta’s survey reveals that consumer nerves are high within reason, given that fraud is a serious threat in today’s digital economy. A quarter of all people surveyed said they have been victims of fraud within the last 12 months, an increase of 25% compared with Marqeta’s 2020 Fraud Report. The number of times consumers have been affected by fraud has also seen an uptick this year: 52% of consumers surveyed who reported being affected by fraud said they were impacted two or more times compared to 48% in 2020. Additionally, 43% of consumers surveyed said they were a target of phishing scams or attempts to steal payment details in the last year.
When digging into how consumers were most affected by fraud, the survey also saw an increase in reported cases of various types of fraud, compared with Marqeta’s 2020 Fraud Survey. Consumers surveyed who reported having their debit card information stolen increased from 30.9% to 37%, those who reported having had their physical cards stolen increased from 22.5% up to 36%, and those who reported having stolen personal information used to open fake accounts increased from 9% to 20%.
“Consumers are getting hit more often, with 25% more people falling victim within the last 12 months than the year prior [to fraud],” said Vidya Peters, chief marketing officer at Marqeta. “The population feels more exposed now than before COVID-19, in turn making consumers more hesitant to try new payments technologies. It’s forcing financial services to step up both the fraud services they offer and how they communicate them to their customers,”
Marqeta’s survey showed one age group in particular — consumers aged 18-34 years old — was impacted by fraudsters at exponentially higher rates: 69% of respondents in this age group who reported having been victims of fraud said they were affected within the last 12 months, compared to 48% of total respondents.
Download the full report here.