Tink Research Reveals UK SMEs Lose Billions Due to Fraud Fears

What's Happening?

Research by Tink and the Centre for Economics and Business Research (Cebr) reveals that UK small and medium-sized enterprises (SMEs) lost an estimated £6.15 billion in direct sales last year due to consumer distrust of manual bank transfers. The report highlights a widespread 'fear of fraud' leading to potential £31.4 billion in indirect losses from reduced customer loyalty and repeat business. Surveys show a significant disconnect between business practices and customer expectations, with many consumers abandoning purchases due to concerns over manual transfers. The backdrop of rising fraud, including £450 million lost to authorized push payment fraud, is making consumers increasingly cautious.

Why It's Important?

The fear of fraud and resulting loss in sales is a critical issue for SMEs, impacting their revenue and customer trust. As consumers become more cautious, businesses must adapt by offering secure payment methods to restore confidence and protect sales. The findings underscore the importance of trust in consumer purchasing decisions, with outdated payment methods posing risks to business reputation and financial stability. The adoption of secure payment solutions like Pay by Bank can help SMEs mitigate fraud risks and improve customer experience, which is essential for maintaining competitiveness in the market.

What's Next?

SMEs are encouraged to adopt secure payment methods to address consumer concerns and reduce fraud risks. Tink, as part of Visa A2A, is working to enhance protections for Pay by Bank payments, aiming to provide security similar to card transactions. Businesses must prioritize payment security to meet rising consumer expectations and safeguard their revenue. The shift towards modern payment solutions is expected to continue, with SMEs needing to adapt to maintain customer trust and loyalty.