Rising Card Fraud Hurts Internet Retailers Too
24/4/2008
Speaking ahead of Internet World 2008, taking place at London’s Earls Court next week, Mark Chirnside Ukash CEO commented, “The £300m of internet and other card not present card losses reported in 2007 represent a threat to the continued growth of online retail. Whilst consumers and merchants both lose out from card fraud it’s also apparent that concerned consumers will increasingly shy away from trading with small, niche or emerging retailers, preferring to play safe by restricting their online purchasing to just the few big-name sites that they perceive to be ‘safe’. Ultimately this will slow down the growth of ecommerce and limit choice and competition”.
For 2007 fraud perpetrated over the internet, phone and mail order increased by 37 per cent to £290.5 million compared with the previous year. This means it now accounts for just over half the £535.2 million of total fraud committed on UK cards*.
And with the recently published undercover investigation by BBC News* revealing how easy it is to obtain credit and debit card details stolen online from small internet retailers there is increasing evidence that worried consumers will restrict their online spending.
“Retailers can adapt their businesses to avoid the risks and reassure their customers by accepting other payment methods such as local post-paid solutions, alternative payments such as PayPal or international pre-paid products such as Ukash”, continues Mark Chirnside. “The advantage of Ukash is that retailers offload their risks as they are assured of receiving the payment prior to shipping the goods. It’s as good as taking cash across the counter!”
By taking payment by Ukash retailers are not liable for the costly ‘chargebacks’ from their bank that result from goods being delivered to people using stolen credit or debit cards. And the chargeback is only one part of the cost of fraud to the retailer as transaction fees, stock shrinkage and the costs associated with managing fraud such as personnel and administration have to be factored in.
“As well as eliminating chargebacks accepting Ukash means that merchants also gain incremental sales from the large number of currently excluded consumers that prefer to pay in cash or don’t have debit or credit cards,” concludes Mark Chirnside.
Ukash representatives will be available at Internet World 2008 on stand E424a.
*APACS www.apacs.org.uk
*”The web trade in credit card details” www.bbc.co.uk/news 23 April 2008
©2008 Smart Voucher Ltd
Smart Voucher Ltd. (of which Ukash is a trading name) is authorised and regulated by the Financial Services Authority in the United Kingdom as an electronic money institution. Smart Voucher Ltd (trading as Ukash) FSA Register Number: 447811.