Online shopping set to soar in UK
But over 80% of survey respondents fear growing fraud
London, November 24th, 2004: A new survey reveals that UK businesses selling online forecast eCommerce revenues will grow by a massive 36% in 2005. The inaugural survey of UK retailers was carried out by CyberSource International Ltd. in association with Retail Logic. The survey is in its sixth year in the U.S. and has been extended to the UK this year.
"Seventy five percent of respondents believe the successful rollout of Chip & PIN in the UK will force fraudsters to turn their attention to online crime," said Nathan Jackson, CyberSource managing director. "As a result, UK operations are even more concerned about online fraud than their U.S. counterparts."
According to the Interactive Media in Retail Group, twenty million UK shoppers will spend £17 billion online this year. By 2009, 25% of all UK shopping will be conducted via the web or mobile devices. eCommerce revenue is growing so fast that a steady fraud rate (reflected in the U.S. survey) means ballooning losses.
Fifty-six per cent of UK respondents say the problem of online fraud will become more serious for them in 2005, compared to 49% in the U.S. Sixty per cent also believe that criminals are continuing to become more sophisticated. UK merchants are currently declining six per cent of orders due to suspicion of fraud, whilst a further 1.6% of orders accepted turn out to be fraudulent.
Seventy-one per cent of UK retailers accept international orders. Those who do, identify Nigeria as the riskiest source of transactions (35%), followed by the USA (13%) and Indonesia (11%).
Address verification and card security code checking are currently the most widely used methods of managing online fraud in the UK. This is mirrored by the U.S. results. Payer authentication and the use of commercially developed fraud screening are seen as the two largest UK growth areas for 2005. For next year, 17% of merchants intend to implement commercially prepared fraud screening products.
One in five UK transactions requires reviewing, but 39% of businesses have no automated systems in place. Manual reviewing is labour intensive and therefore costly. Twenty eight percent of companies see the need to hire more staff in 2005 to handle the workload.
"Only 28% of merchants expect to be able to increase their manual review staffing levels in 2005," said Mark McMurtrie, Retail Logic marketing director. "But sales are projected to grow by up to 36%. This implies that most merchants will need to improve productivity to keep up with sales growth. Yet with each manual check taking three minutes, they simply won't be able to cope with demand - automated systems are an obvious answer.
"The only real alternative would be for merchants to review fewer orders to handle increased sales volumes, thus increasing their exposure to fraud."
Downloads
Online Fraud Survey Results (PDF)
Online Fraud Survey Presentation (PDF)
Best Practice in Risk Management Presentation (PDF)
For further information contact:
CyberSource
Rosie Leishman
+44 (0)118 965 3861
rosiel@cybersource.com
www.cybersource.com
About Retail Logic
The Retail Logic team has been providing payment processing software for more than 16 years. Covering any form of payment card and transaction environment, Retail Logic's software now handles more than £100 billion a year. Investment in people and research and development, together with a clear focus on the needs of retailers, have led to award-winning products and European market leadership.
Part of The Logic Group, which also comprises specialists in communications and customer relationship programmes in the shape of Commslogic and Loyalty Logic respectively, Retail Logic trades under the Logic Group banner outside the UK.
About CyberSource
CyberSource International Ltd. is a wholly-owned subsidiary of CyberSource Corporation. CyberSource is a leading provider of electronic payment and risk management solutions. CyberSource solutions enable electronic payment processing for Web, call centre/IVR, and POS environments and manage fraud risk associated with card-not-present transactions. CyberSource Professional Services designs, integrates, and optimises enterprise-wide commerce transaction systems. Over 5,000 businesses use CyberSource solutions, including half of the Dow Jones Industrial companies. The company is headquartered in Mountain View, California, and has sales and service offices in Japan, the United Kingdom, and other locations in the United States. For more information, please visit CyberSource's web site at www.cybersource.com or email uk@cybersource.com.
