More than one in eight UK online retailers is losing upwards of five per cent of their yearly revenue to fraud, research has found.
The Fifth Annual UK Online Fraud Report from payment management firm CyberSource found that more than half of UK adults still do not shop online. Of those, 62 per cent prefer high street shopping, 47 per cent do not have internet access and 41 per cent are scared off by security concerns.
Two thirds of all the 1,000 consumers surveyed admitted they have misgivings about the security of online shopping. But 84 per cent of online shoppers opt for internet merchants because they provide a wide range of goods and services.
The convenience of online shopping attracted 81 per cent while low prices were a deal clincher for 67 per cent of internet consumers. More than a third of respondents have been a victim of online credit card fraud or know someone who has.
Just over half of online traders expect growth this year, compared with four fifths 12 months ago. Sixty-four per cent now ship to mainland Europe, up eight per cent on 2008, while 49 per cent ship to the US, a 12 per cent rise on last year.
Asia Pacific is seen by many as a lucrative market and 13 per cent of UK online retailers will be going after it this year. More than a third are losing more than one per cent of revenue to fraud with more than half rejecting more than one per cent of orders due to suspicions of fraud.
Despite this, theft of customer data is still rated as the number one threat for online internet traders, with fraud a close second. Cybersource managing director Simon Stokes claimed high-profile security lapses helped fuel consumers' fears.
“With the abundance of media coverage about security breaches, it is not surprising that some shoppers are frightened off," he said “The challenge to the industry is educating consumers to shop safely, to minimise their exposure to fraud.
"As more people gain access to the internet and realise the convenience, value, and safety of shopping online, I believe we will see a higher percentage trying and staying with this form of purchase.”