Card Not Present Fraud Reshaping Online Shopping Habits
The skyrocketing card-not-present (CNP) fraud is reshaping online shopping behaviors, consumer security concerns and payment card usage, according to a new study released today by Tender Armor and Sparks Research.
The study, entitled “CNP Fraud Consumer Impact: Anxiety that Reduces Credit and Debit Card Usage,” found that card-not-present credit and debit fraud increases consumer anxiety and negatively affects their online spending habits, which hurts e-commerce retailers’ bottom lines. In fact, 56% of the survey respondents said they took some action after a fraudulent event, including closing payment accounts (15%), decreasing online shopping (12%) and reducing payment card usage (12%).
To prevent sales from being negatively affected, the study found retailers need to alleviate consumer concerns.
“Our study revealed that 78% of online shoppers want more protection for their payment card data when shopping online,” said Madeline Aufseeser, CEO of Tender Armor. “Consumers desire more security while transacting online. Consumers stated that their online shopping declines after a fraud event. Lower card usage, card account attrition, and less shopping are the silent revenue killers for FIs and merchants alike. Avoiding these long-term ramifications, is in the industry’s best interest. It ensures consumers feel safe clicking the ‘buy’ button.”
The study was conducted online and surveyed 1,013 online shoppers during the first quarter of 2016.