The most frequent victims of payment fraud are under the age of 24, 1/3 of Poles check to see if the website address does not look suspicious, every third company admits that the number of scams has increased over the last 12 months, and the most common methods of fraud are copies of pages imitating the brand, affiliate scams and data leaks – reveal the latest data from Adyen Retail Report 2023.
Cyber fraudsters are taking increasingly bold steps to track businesses and their customers, not only in physical space but also in the virtual world – especially if we consider the landscape of today’s trade. Over the last year, payment frauds have affected 1/4 of companies in Poland, and every third one admits that their number has increased compared to 2022.
The most common types of payment crimes include, in order: affiliate fraud, which is a method involving manipulation of site traffic or account registrations; creating faithful copies of popular web pages and data leaks, which are experienced by about every fourth company in the country.
Polish entrepreneurs admit that the increased number of attacks is one of the biggest threats to their business. Despite this, only 20 percent of companies invest in risk management systems today. This is alarming given that as many as ¾ of Poles clearly say that sellers need to do more to protect consumers from payment-related scams (78 percent). This is up by as much as 26 percent from last year – the need is growing.
Who is in the crosshairs?
It turns out that internet scams mainly affect two age groups. 18-24 years is the age range that is most often affected – 1 in 5 young Poles have already encountered them. The amount stolen as a result of criminal activity averages 746 PLN in this case. However, it can be significantly larger when the victims of fraud are people over the age of 55. The Adyen Retail Report study showed that it is this age group that fraudsters steal the most from, averaging as much as around 1700 PLN.
Dangerous actions are usually carried out for personal gain, with innocent customers becoming the victims. 73 percent of respondents admit that fraudsters decrease the attractiveness of online shopping, as this involves additional effort for them. For example, every third Pole always checks the URL of the website to make sure it doesn’t look suspicious (37 percent). Furthermore, 39 percent do not activate the function on their computer/phone to remember payment details because they fear fraud – this significantly lowers the level of convenience and speed of online shopping. However, consumers prioritize their safety over these values – ¼ indicate that they like when the seller asks to confirm identity using two forms of authentication, as this increases their sense of certainty.
As it is well known, customer data is the key to a brand’s success. However, this is a reciprocal transaction – customers share information about themselves with the brand when it streamlines their purchasing process, i.e., if it becomes more convenient, faster, and tailored to their choices. Half of consumers prefer sellers who remember their preferences and previous purchasing behavior to create a more tailored shopping experience (53 percent), and as many as 77 percent of consumers expect personalized services and discounts from their favorite brands.
Customers must choose – either quickly and conveniently, or safely?
Ensuring customers that their data is safe is one of the most important factors in strengthening a company’s position against the competition. It is the duty of merchants to reduce the number of frauds and protect customers, though the verification of users and transactions should not take place at the expense of consistency in their experience with the company – otherwise, the return of consumers to selected services may be charged with high risk. Entrepreneurs should stay vigilant and ensure that they choose an approach that ultimately guarantees customers undisputed security. One of the tools that addresses these needs is biometric authentication with an enhanced user path, where authentication does not require many actions from the client. The solution reconciles two aspects: the customer feels safe, and the process itself is trouble-free enough that it does not burden them further.
The positives can also be found in the fact that each year an increasing percentage of companies turn to technology to secure their websites, applications, and e-stores. The study showed that almost half of Polish companies (47 percent) have solutions based on artificial intelligence, which merchants use to prevent dishonest transactions, eliminate abuses, and theft of identity (this represents a 6 percent increase from last year). This is because activities such as card testers using bots or scripts are becoming more popular.
“A suitable solution based on artificial intelligence algorithms and machine learning can easily identify them, for example, by detecting irregularities in transactions subject to analysis in a small time frame. Companies can create buyer profiles to understand their regular behavior and how it differs when an account is taken over by an unwanted individual. In real time, hundreds of interconnected parameters are taken into account, even if the buyer changes the device or network. The system signals unusual user behavior, indicating the risk of abuse,” explains Jakub Czerwiński, vice president of Adyen for the Central European market.
Given that payment issues – their security, choice of options, and speed – are so important for buyers, e-commerce should invest more in this area of activity. That’s why Polish representatives of the retail sector promise customers – more than 1 in 3 companies plan to double the number of employees in the fraud and risk team. Quick detection of anomalies, with a maximum reduction of manual operations and full transparency of transactions, is currently one of the most important elements securing the development of e-commerce.
About the study
The study was conducted between 03.02 – 01.03.2023 with Censuswide on a group of 36,000 consumers, 12,328 retail businesses, from the UK, Singapore, Hong Kong, Japan, Australia, UAE, France, Italy, Spain, Portugal, Germany, Poland, Belgium, the Netherlands, Brazil, Norway, Denmark, Sweden, USA, Canada, Malaysia, Mexico, Ireland, and India (at least 500 business respondents in each country). In Poland, the Adyen Retail Report 2023 study was conducted on a group of 500 people managing commercial companies and 1000 consumers. Adyen is a modern financial technology platform chosen by market leaders, working with companies like Facebook, Uber, H&M, eBay, and Microsoft.
