UK Online Retailers: We’re Beating Fraud

Report shows retail fraud falling as a proportion of online spend; Industry "needs to stop scaring the consumer"

READING, UK, 6 December 2005

Online retailers are winning the battle against digital fraudsters according to a new survey by CyberSource, a leading provider of electronic payment and risk management solutions. Figures from CyberSource's second annual fraud survey, involving more than 160 online retailers in the UK, show that while fraud remains an issue, modern security tools can make the problem manageable.

65% of those surveyed had seen losses from online fraud stall or fall in the last twelve months. Only 16% observed that fraud has risen as a proportion of revenues. This contrasts strongly with public perception of the problems of Internet fraud: according to research carried out for the government's 'Get Safe Online' campaign, one in five people in the UK rates Internet crime of greater concern than car theft or even mugging.

Nathan Jackson, managing director of CyberSource commented: "There is a clear disconnect between consumer feeling and retailer reality about the problem of online fraud. While retailers are investing heavily in beating fraud - often successfully according to our research - the public is being made to feel nervous about shopping on the Web. The online retail community needs to continue working to beat fraudsters, but while we should be promoting prudence we shouldn't be scaring the consumer away from buying online."

CyberSource's inaugural 2005 report showed that online retailers feared a leap in Internet fraud driven by the introduction of chip and PIN to high street stores. Instead, the latest figures from APACS show that online fraud climbed by a relatively low 5% in the first six months of this year. The major growth has been in defrauding mail order and telephone order businesses that sometimes lack the sophisticated anti-fraud technology employed by online retailers.

"E-commerce is a rapidly growing sector in the UK economy, with our latest figures showing 38% growth in September, year on year. We need to ensure that consumers continue to be careful when buying online, but the fact is that shopping on the Internet is no more risky than shopping elsewhere," commented Jo Tucker, managing director of the Interactive Media in Retail Group (IMRG).

The Second Annual CyberSource UK Online Fraud Survey was sponsored by CyberSource Ltd. The survey was conducted over two weeks in September 2005 and yielded 160 complete responses. The sample was drawn from a database of companies involved in electronic commerce activities. As an incentive to complete the survey, respondents had the opportunity to win one of three handheld games consoles.

About CyberSource
CyberSource 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, and POS environments. CyberSource also offers industry leading risk management solutions for merchants accepting card-not-present transactions. CyberSource Professional Services designs, integrates, and optimises commerce transaction processing systems. Approximately 12,000 businesses use CyberSource solutions, including half the companies comprising the Dow Jones Industrial Average. 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.

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