Fraudsters can be accused of plenty of things, but a lack of persistence, or inactivity, certainly isn’t one. Research from the Global Fraud Attack Index shows that fraud attacks jumped by 137% in the year ending March 2016. The result is that fraud now affects $7 out of every $100 of global retail spend. The biggest growth area for fraud is now digital goods, which has seen a 186% spike. In the first quarter of 2016, there were 34 attacks for every 1,000 transactions, with the attack rate tripling for digital goods and more than doubling for luxury goods. This spike has led to yet another increase in the cost of fraud, which rose by 18.9% in Europe. Clearly, merchants are encountering an unprecedented level of fraud that they need to combat to maintain the security and trust of their customers.
The Customer Cost of Fraud
The tactics used by fraudsters are becoming increasingly intelligent and sophisticated, creating a new set of challenges for merchants that are determined to keep their customers happy and their profits intact. As security becomes more stringent, customers can become frustrated with the measures they have to take simply to make a purchase online, and those feelings can have an impact on a company’s bottom line. For many consumers, the inconvenience caused by additional fraud screening steps could even cause them to change their brand loyalties. While the frustration fraud screening measures might not necessarily cause customers to cancel their accounts, it can affect their trust in a company, and ultimately their shopping habits too.
How Can Secure Direct Debit Help?
Taking payments online by card might be a convenient way to take payments from your customers, but there are considerable risks involved too. Security is now an incredibly important aspect of the purchasing process for customers, with 58% of customers blaming a failure to complete a payment on security concerns. Direct Debit and secure card payment gateways can help to solve the increasing threat of fraud by providing a safe and secure method of processing the payment. The security advantages of Direct Debit are one of the main reasons an increasing number of merchants are choosing to use this system. Each payment made by Direct Debit is subject to a number of rigorous security processes to make sure all collections are made securely. There are also risk management checks conducted to ensure any unusual transaction which doesn’t fit a client’s usual billing pattern is picked up and questioned.
What Payments are Suitable for Direct Debit?
There are a number of payment types that could be moved to secure Direct Debit rather than being processed as card transactions. Direct Debit can enhance the payment security of businesses that commonly:
- Receive fixed subscription or membership payments
- Invoice customers based on usage
- Offer customers flexible payment terms
Make the Move to Secure Direct Debit
If you are looking for a safe, secure and reliable way to process payments and give your customers peace of mind, please contact London & Zurich today.