28 percent exercise more caution when making digital payments; awareness of scams and anti-fraud measures high as banks remain first line of defense for consumers
Almost half of Indian consumers (47%) are more concerned about digital payments fraud now than when the novel coronavirus first emerged, according to a new study conducted by YouGov and ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions. When using digital payment methods, 28 percent of respondents are also now exercising greater caution.
If impacted by fraud, the majority (60%) of respondents would first call their bank to block their account, indicating that — during this time of heightened awareness — consumers consider their bank the first line of defense. Twelve percent would first report fraud activity to police or a cybercrime unit, while a mere 4 percent would turn to public social media channels first.
Efforts by Indian authorities to encourage contactless digital payments over cash as a hygiene measure are resonating with consumers — one-third (32%) have increased their usage of digital payments (credit and debit card, mobile wallet and other UPI-based payment methods) due to the push from NPCI, aimed at helping curb the spread of COVID-19. However, 1 in 10 respondents reported using cash more frequently now.
“The disruption caused by the COVID-19 pandemic provides another opportunity for fraudsters to dupe unsuspecting consumers,” said Kaushik Roy, vice president & country leader – South Asia, ACI Worldwide. “However, it is encouraging that consumers are showing heightened awareness of digital payments fraud and a willingness to adapt behaviors. It appears that anti-fraud and security measures implemented by banks are also widely acknowledged and understood, and that banks are still seen as the trusted source of support against fraud.”
Respondents expressed a high level of familiarity with assorted anti-fraud and security measures deployed by their bank or financial institution.
• 75 percent recognize one-time password (OTP) as a key anti-fraud mechanism deployed by their bank
• 66 percent utilize SMS/email notifications on their phone
• 55 percent are aware of two-factor authentication as a security measure
“Continued vigilance on the part of banks and their customers is paramount, as fraudsters are constantly evolving their methods — whether its harnessing new technology or adapting ‘social engineering’ tactics — to exploit the disruption,” continued Roy. “Banks can help their customers through both active customer communication and education around fraud risks, as well as taking an enterprise-level, cross-channel approach to fraud prevention.”
Other key findings and trends:
Payment behaviors and spending patterns
• Adoption of digital payments is widespread, with 75 percent using a digital payment method at least once a week and 44 percent using one almost daily.
• Only 3 percent have never utilized a digital payment method. Only 7 percent cited inconvenience (compared to cash) as a major concern when it comes to digital payments.
• Limited merchant acceptance was identified as a top concern by only 19 percent (compared to 23% in a similar survey conducted by ACI in October 2019).
Fraud and payments security
• Nearly one third (31%) have been a recent victim of card or digital payments fraud or know someone among their immediate family or friends who has. 17 percent of those occurrences have been within the last month.
• Vulnerability to fraud remains the biggest consumer concern when it comes to digital transactions (54%), followed by risk of failed transactions (42%). Insufficient internet connectivity and concerns about data privacy were also cited as significant concerns, by 38 percent and 36 percent, respectively.
• When asked about digital payment fraud risks, fake apps and websites are the biggest, according to 52 percent of respondents, followed by compromised password/credential information (43%) and spyware/malware (39%).
• Card cloning is the most common concern when it comes to debit or credit card fraud, with 1 in 3 (29%) seeing this is as the biggest risk. Approximately 1 in 5 cited stolen/lost cards (22%) or eCommerce/mobile channel fraud (21%) as their top card fraud threat.