Cybersecurity remains a significant issue for UK consumers, with 36% of Brits falling victim to phishing scams in the past six months alone, according to digital transformation consultancy Daemon.
Beyond phishing scams, online shoppers are facing a range of other issues, including non-delivery of purchased items (33%), credit card fraud (30%), counterfeit goods (28%) and identity theft (17%).
Marc Peiser, Cybersecurity Expert, Daemon, commented: “The prevalence of scams and fraud that consumers have reported experiencing in such a short time is alarming. As customer trust becomes inseparable from their shopping experience, it’s clear that retailers must bolster their cyber security efforts to safeguard their customers and maintain strong relationships.”
The high level of fraud has greatly affected consumer trust in online retailers, with 42% of people saying they now have much less confidence in these businesses, according to the study.
When asked about restoring trust, 45% of consumers highlighted the importance of fast and accessible customer support for addressing security concerns. Other factors that build trust include displaying security certifications and badges from reputable third-party providers (30%) and the use of Artificial Intelligence (AI) to detect fraud (24%), which gives consumers greater confidence when shopping online.
AI has become a prominent tool in the fraud landscape, being used both to detect fraud more effectively and, unfortunately, to commit it through methods like deep fakes.
Addressing this dual-use challenge, Roger Alexander, Key Advisor to Chargebacks911, recently explained to Payment Expert how the company is leveraging AI to tackle chargeback cases.
Consumer distrust also extends to payment options, with over half of consumers (57%) considering cash the most secure method, followed by credit and debit cards (44%) and PayPal (38%).
However, trust in digital wallets and other payment methods varies significantly by age. Only 12% of Baby Boomers trust digital wallets, while this rises to 26% among Millennials and 40% of Gen Z.
Conversely, 67% of Baby Boomers see cash as highly secure, compared to just 50% of Gen Z. Similarly, Buy Now Pay Later (BNPL) services are viewed as secure by 27% of Gen Z, but only 15% of Millennials and 9% of Baby Boomers share this confidence.
Peiser added: “As retailers introduce more payment options, it’s clear that consumer preferences must be factored in. There’s also a need for greater education around the security of newer payment methods to boost adoption, especially as cash usage continues to decline.”
Fraud remains a dominant topic in the UK, with Authorised Push Payment (APP) fraud a particular concern. Recently, the government introduced two new rules for financial institutions alongside the Fraud, Error and Debt Bill, which aims to crack down on fraud in the social security system, potentially saving £1.6bn.
