Thursday 12th June, 2014

In a study published by Sage Pay, more than 40 per cent of SMEs have experienced some level of fraudulant activity over the last 12 months, with an estimated cost per business of £4,515.

However, almost 40 per cent of businesses fail to spend any money on fraud prevention and 42 per cent of companies don't know if they comply with the Payment Card Industry Data Security Standard.

And yet, in a statement which might be seen as counterintuitive, Sage Pay's CEO, Simon Black points out that there is such thing as a “healthy level” of fraud.

He said: “This study shows that fraud levels are spiralling out of control and more must be done to reduce the amount of money lost each year. But companies need to be pragmatic – eradicating fraud completely could be damaging for a business.

“Experiencing no fraud may mean controls are too tight and legitimate transactions are being rejected. Many businesses simply void the transaction immediately if they suspect fraud, rather than undertake further checks. In doing so, they’re likely to be turning away genuine customers who have simply entered their details incorrectly.

“Although it can be tempting to tighten security controls in the face of fraud, it is worth keeping in mind that for every extra action a consumer is asked to make, you are prolonging the customer journey and therefore increasing the risk that the customer will drop out of the buying process.”