CyberSource(R) 2001 Fraud Survey Finds Online Merchants Optimistic About Holiday Sales, Yet Concerned About Growing Credit Card Fraud
Over Half of Merchants Expect Their Online Sales Volume to Increase
An Average of 37% and Fraud Rates to Triple During the Holiday Season
MOUNTAIN VIEW, Calif., Nov. 15 -- Businesses selling online
remain optimistic about online holiday sales for 2001, even in the wake of the
September 11th attacks and a somewhat questionable economic climate, according
to results of the third annual CyberSource Fraud Survey.
The survey, which was conducted in late September 2001, found that more
than half of those surveyed (54 percent) expect their online sales volume to
increase an average of 37 percent during the season, a 17 percent expected
volume increase over last year.
While merchants expect sales volumes to increase significantly this
holiday season, they are also expecting fraud rates to increase more than
three times the average fraud rate merchants experience the rest of the year.
With 54 percent of respondents viewing online credit card fraud as "very
serious," concern has intensified and 65 percent are taking more precautions
this year than last to prevent fraud during the 2001 holiday shopping season.
Significant Business Impacts of Fraud: Bottom-Line Losses and Operational
Inefficiency
Merchants reported that online fraud significantly impacts their
bottom-line profitability and that addressing fraud problems can result in
significant operational inefficiencies. Fifty-seven percent rated revenue
losses as the number one negative impact of fraud to their business, a 33
percent increase over last year. Fifty-three percent selected loss of staff
time as the second highest impact of fraud.
Fastest Growing Concern: Having Enough Resources to Combat Fraud
In a related finding, while respondents indicated their highest concerns
about managing fraud continue to be accurately detecting it and rejecting
valid orders, their fastest growing concern is having enough resources to
effectively combat it. Fifty percent of respondents rated this problem as one
of their highest concerns, representing the most significant change -- a
61 percent increase from last year`s 31 percent.
"The results of this year`s survey confirm what we have learned in the
course of working with thousands of businesses selling online: many merchants
have implemented complex business rules and manual review processes to address
fraud. As a result, savings gained by stopping fraud are often lost due to
inefficient methods of prevention," said Jeff King, Director of Product
Management at CyberSource. "Because online fraud is a complex problem and
changes quickly, merchants need to have a comprehensive, automated system in
place that allows them to effectively detect and manage it, without
sacrificing operational efficiency and profitability."
The survey was commissioned by CyberSource Corporation (Nasdaq: CYBS), a
leading provider of risk management and electronic payment solutions for
enterprise businesses, and conducted by independent research firm, Mindwave
Research. Respondents invited to participate in this study were drawn from a
combination of sample sources, including retail businesses and consumer
product manufacturers. The base reflects a blend of small, medium and
large-sized businesses.
For a detailed presentation of the CyberSource 2001 Fraud Survey results
and related information about fraud detection tools and risk management
solutions, call or email editorial contacts Jennifer Jennings,
jjennings@cybersource.com, 650-965-6042, or Liz Haas, liz@atomicpr.com,
415-703-9454.
More on CyberSource risk management solutions:
http://www.cybersource.com/solutions/risk_management/ .
About CyberSource
CyberSource Corporation is a leading provider of risk management and
electronic payment solutions for enterprise businesses selling via multiple
sales channels. CyberSource solutions manage transaction risk and enable
real-time payment processing for Web, call center/IVR, and POS environments.
CyberSource professional services designs, integrates and optimizes
enterprise-wide commerce transaction systems. Over 3,000 businesses use
CyberSource solutions, including over half of the Dow Jones Industrial
companies. The company is headquartered in Mountain View, California, and has
sales and service facilities in Japan, the United Kingdom, and other locations
in the United States. For more information, please visit
CyberSource`s web site at http://www.cybersource.com or email
info@cybersource.com.
NOTE: CyberSource is a registered trademark in the U.S. and other
countries. All other brands and product names are trademarks or registered
trademarks of their respective companies.
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CONTACT:
Jennifer Jennings of CyberSource Corporation
+1-650-965-6042
jjennings@cybersource.com
Liz Haas of Atomic tech PR
+1-415-703-9454
liz@atomicpr.com
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