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Consumers know and understand the potential for online fraud when shopping on e-commerce sites and they are willing to take extra steps to help keep their data secure, but most merchants don’t provide the additional security, according to the new 2016 American Express Digital Payments Security survey that polled over 1,000 consumers and 400 merchants. The survey showed that 78 percent of consumers are willing to enter a card verification code if it helps mitigate their online fraud exposure, but only 57 percent of merchants require such measures.

Additionally, the survey showed that 73 percent of consumers were willing to verify their billing addresses, but only 47 percent of online merchants require them to do so. They found similar results with answering security questions (70 percent of consumers were willing to answer them, but only 43 percent required them) and one-time passwords (68 percent of consumers said they would use them; 37 percent of merchants used the technology).

As online commerce continues to grow, results such as these become even more important, especially in light of additional statistics that show nearly half (48 percent) of customers who shopped online in 2015experienced payment fraud and 60 percent of merchants had fraudulent online sales.

“Payment fraud can impact a merchant’s bottom line,” Mike Matan, VP of industry engagement, product and marketing for American Express’ Global Network Business, said in an article on “Fighting fraud for our cardmembers and merchants is an ongoing priority at American Express. We offer some services and features to help cardmembers monitor their account information and help prevent fraud at the point of sale, including one-click alerts to confirm charges via text, email and our mobile app. Our investments in technology and advanced analytics have also enabled American Express to achieve the lowest fraud rates in the industry.”

So what can merchants and consumers do to reduce the chance of fraud when shopping online?

For merchants, simply giving customers what they want in additional authentication will be a big step in not only helping customers feel more secure while shopping on their sites but also in reducing fraud. The statistics show customers want more authentication methods, and they are willing to provide additional information like CVV codes, answering security questions and verifying their addresses. Merchants would be doing their customers – and themselves – a favor by adding these authentication methods to their checkouts.

On the customer side, the biggest thing they can do to help themselves is to adopt more stringent password rules. Too many people use a handful of passwords across several online accounts, meaning your Facebook password could also be the password for your bank, your email and your department store log-in. A single password compromise gives a thief access to every
account to which it is tied. While this may not be a huge issue for some accounts, it could quickly become disastrous if your banking and credit card information becomes compromised.

The American Express survey mentioned above discovered only 44 percent of customers use a different password for each of their online accounts, and only 20 percent change their passwords twice a year. Shockingly, 17percent never change banking or payment passwords. So the moral of this story is if you are going to use passwords over several sites, at least change them frequently.

While nothing will eliminate it completely, consumers and merchants must work together to reduce the incidence of online fraud. A good place to start is by giving customers the extra authentication they desire, but customers must do their part, as well, by following stricter password rules. Just like offline fraud, online fraud, unfortunately, isn’t going away, but together merchants and customers can lessen its
impact, making the internet a safer place to shop and sell for all.

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