Build Trust with Consumers by Investing in Fraud Prevention
Most businesses that process or receive credit card payments probably assume card attacks and fraud risks are inherent parts of the job. After all, global credit and debit card fraud hit $28.6 billion in losses in 2020, and losses stemming from fraud are expected to balloon to more than $408 billion over the next decade. When considering the time and money it takes to invest in fraud prevention, most companies would rather eat the costs of fraud instead of eliminating it.
What these businesses don’t realize is that card fraud and prevention is top-of-mind when consumers consider opening a new credit or debit card and when choosing a prepaid card or gift card.
A recent survey from Brightwell found that 83% of respondents said security and fraud prevention is extremely important when opening up a new credit or debit card, while 95% said security and fraud prevention is extremely or somewhat important when choosing a prepaid card or gift card.
What’s more, a whopping 75% of respondents would consider canceling their card in the event of fraud.
Translation: Businesses need to invest in fraud prevention if they want to attract AND retain customers.
Consumers are Ready to Take Action Against Card Fraud
In the recent survey conducted by our team at Brightwell, we found that an overwhelming number of consumers are ready to take immediate action when fraud does happen, including canceling their cards. [Read "Consumers Ready to Take Action."] Nearly three out of ten respondents even reported that they would leave their financial institution entirely after experiencing fraud.
And I can’t blame them! Not only do consumers lose out on their hard-earned funds when fraud occurs but they also waste time and energy reporting it. They also risk negative impacts to their credit score or going without a line of credit while they coordinate receiving a new card from their bank.
52% of respondents also reported that they would talk to their friends and family about their experience. So even if someone wasn’t directly impacted by card fraud at your business, they could associate your business with negligence or security risks based on their friend or loved one’s experience.
Younger Generations Prioritize Fraud Prevention
What’s even more, our survey found that younger generations prioritize fraud prevention more than Boomers or Gen X consumers. Among adults aged 20-39, card fraud was the most common form of identity theft in 2021. As younger generations experience higher rates of fraud, they’re more aware of its risks and may begin to hold card issuers, banks, and digital wallet providers accountable.
Younger generations are also more likely to report fraud. Our survey findings showed that 36% of Gen Z consumers and 38% of Millennial consumers reported experiencing card fraud in the last year, while only 22% of Baby Boomer consumers reported card fraud. Anecdotal evidence suggests Baby Boomers experience card fraud at a similar rate compared to other generations, but are less aware of - or less reactive to - it.
This data suggests that by investing in fraud detection and prevention, businesses stand to build trust with their customers and attract and retain younger generations of cardholders. [Read “Improve Fraud Detection and Prevention to Retain Younger Customers.”]
Businesses Need to Detect and Prevent Fraud Before it Happens
Fortunately, there’s a solution for detecting and preventing payment fraud. Brightwell’s fraud tools [Link to landing page] prevent prepaid and debit card fraud by detecting malicious patterns in card transactions at the merchant-level, all while displaying card data in real-time. Once activated, Brightwell’s tool Arden prevents all enumeration attempts.
In addition to fraud prevention, Brightwell’s Compliance as a Service (CaaS) tools help businesses verify customer identities with KYC verification and ensure compliance with card, data privacy, and cross-border payments regulations. This helps businesses save money and avoid the costly fines associated with not only non-compliance but also card fraud.
Consumers care deeply about card fraud and risks. By caring about it as much as they do and investing in fraud prevention software, businesses stand to not only attract and retain loyal customers but they also save on costs associated with fraud. By implementing cutting-edge technology and compliance services, businesses can fight prepaid, debit, and credit card fraud at the source so it never crosses the consumer threshold.
Schedule a demo with Brightwell to see how our tools can help protect your business against fraud and strengthen your customer relationships.
