New research from Visa reveals that over two-fifths (41%) of small to medium-sized businesses in the UK have fallen victim to fraud, with the average loss due to fraudulent activities in the past year amounting to £3,808.
The most commonly reported types of fraud include bank account hacks (23%), billing and invoice fraud (26%), and phishing scams (24%). The survey highlights that such incidents can significantly hinder the growth of SMEs, as consumers increasingly prioritize security when making purchasing decisions.
The findings indicate that average consumer spending decreases by 46.2% after experiencing fraud, with 91.2% of victims reducing their spending in the following six months. As fear of fraud drives consumers toward larger businesses, SMEs are further impacted; the study shows consumers are seven times more likely to feel secure shopping with larger companies (45%) compared to small businesses (6%).
When it comes to online purchasing decisions, transaction security (48%) is the second most important factor for shoppers, following the price of goods and services (62%), and ahead of ease of returns and refunds (29%) and customer reviews (27%).
Mandy Lamb, Managing Director of Visa UK & Ireland, states, “Small businesses should not be held back by fraud. We already invest heavily in technology to safeguard small businesses, leveling the playing field between them and larger competitors in the online market.” She also noted that Visa has invested £8 billion globally to enhance network security over the last five years, which has helped prevent an estimated £30 billion in global fraud annually.