It’s claimed that payment fraud is costing each UK small business over £4,500 per year on average in lost revenues and the costs of managing fraudulent activity. The Federation of Small Businesses puts the number of SMEs in the UK at 4.9 million, and Action Fraud suggests that one in four of those are affected by fraud each year. The research from Sage Pay outlines the total annual losses as having reached a worrying £22 billion over the last 12 months.
Three per cent of those surveyed admitted that their business has lost over £10,000 to fraud within the past year. The number having lost between £5,001 and £10,000 was not far behind at four per cent. A substantially higher amount of companies have seen smaller yet no less troubling losses, with 17 per cent claiming to have lost up to £1,000 to fraud.
A few pounds here and there may not be the end of a business, yet over time these losses could add up to a more severe deficit.
Failing to put necessary measures in place to safeguard customer information can further harm the reputation of your business if consumers are victims of fraud. Cyber criminals are increasingly choosing to target databases and access personal information – make sure this is encrypted, tokenised and stored on a secure platform.
Sage Pay’s research of more than 1,000 business decision makers in the UK showed that 39 per cent do not spend any money at all on fraud prevention. That figure desperately needs to be reduced, especially as losses through fraud continue to rise.
A further 21 per cent did not know which preventative tools, if any, they had in place or at their disposal. There are steps every business can take to start fortifying their defences:
As part of their own conclusions, Sage Pay unusually makes the assertion that low amounts of fraud could actually be good for business. This claim is made on the basis that, if SMEs never encounter any fraud at all they will never know how to deal with it effectively.
In addition, companies that void and refuse transactions immediately on even the slightest suspicion of commercial fraud may be inadvertently turning away genuine customers. Placing more security protection and data input fields into the purchase process could also put potential consumers off.
Do you want to know more about various different methods that fraudsters use to pass into the heart of an organisation and how to protect your business against this growing issue? Go directly to our download center and download the eBook for free!