- Consumer education campaign to promote safe online shopping habits and protection against different types of payment-related frauds
Jeddah, Saudi Arabia; May 14, 2017: Global payments technology company, Visa (NYSE:V) today launched a campaign to help promote a safe and secure payment ecosystem in Saudi Arabia by educating consumers on how to protect themselves against different types of payment-related frauds.
To help people stay safe when shopping online, Visa surveyed the Kingdom’s consumers to understand their experiences, attitudes and behaviors regarding e-commerce.
A country of keen online shoppers
The Visa-commissioned survey found that half of people in Saudi Arabia (49 per cent) are frequent online shoppers, with one in ten using e-commerce sites almost every day. Saudi nationals are the most frequent shoppers (55 per cent) and also the biggest spenders, buying goods and services online worth SAR 3,126 each month, compared to an average of SAR 2,606. However, with 51 per cent of people shopping online every 2-3 weeks or less, there is a huge opportunity for further expansion of the sector over the coming years.
Travel and entertainment categories make up three of the top ten goods and services most commonly purchased online. Meanwhile, the finding that 61 per cent of respondents pay for government services online underscores the success of the Kingdom’s e-government action plan.
Security concerns could be holding back e-commerce
The survey identified reluctance among some consumers to pay electronically for certain goods and services they buy online. For all product categories surveyed there is 4-11 per cent difference between consumers buying and paying for goods and services online, with the trend particularly pronounced in clothes and apparels, restaurant orders, hotel bookings and electronics. This discrepancy creates unnecessary friction in the system, such as the inconvenience to consumers of having to take out money, and the cost to merchants of handling cash and checks.
While payments by card (78 per cent) are the most common method for paying online, cash on delivery (59 per cent) remains very popular. The security of transactions when using payment cards online is important to the overwhelming majority of people (81 per cent), although less so for younger people aged 18-25 (63 per cent).
The majority of consumers (56 per cent) are comfortable using digital payments on e-commerce sites, with the remainder having varying levels of apprehension. However, the more consumers use their cards, the more secure they feel, with 65 per cent of card users feeling secure making online payments, compared to 25 per cent of non-users.
While consumers are right to be alert when shopping online, the survey found the reported incidence of card fraud is actually relatively low. However, older people seem to have been disproportionately affected, with 31 per cent of 46-55-year-olds saying they have been a victim of payment card fraud. The lower reported incidence among younger generations suggests those who have grown up in a digital world are potentially more aware of the risks.
Unlocking the Kingdom’s e-commerce opportunity and cashless future
Approximately a third of respondents (31 per cent) say a barrier to them paying by card online is that they want to see the product first-hand before making payment, while a similar number (29 per cent) choose cash on delivery because it assures the product will arrive.
Consumer anxiety about shopping online is exacerbated by concerns about unfamiliar websites, with only 29 per cent reporting they would shop from sites they do not know.
The study suggests that one of the keys to expanding the e-commerce sector and increasing the use of digital payments is for merchants to offer a clear refund or replacement policy. More discounts and rewards would also influence 65 per cent of respondents to pay electronically when shopping online.
A safe and secure online shopping environment
Visa encourages online shoppers to take measures to protect their card when shopping online, for instance by not sending their card number and CVV by email or phone, by avoiding unfamiliar websites, by not entering card details on suspicious promotions that seem too good to be true, and by activating tools like Verified by Visa (VbV), an authentication tool that ensures payments are made by the rightful owner of the Visa account.
Chamseddine Bessaker, Head of Risk for UAE, Saudi Arabia & North Africa, Visa commented: “There is nothing more important to the Visa payment network than trust, especially as consumers in the Kingdom increasingly transact digitally. To overcome consumer concerns and to unlock Saudi Arabia’s full e-commerce potential, Visa advocates a multi-layered security approach to tackling fraud, with the cardholder an integral part of the solution. Equally, there are a number of relatively simple steps merchants can take to build further confidence in the online shopping experience.”
An important part of Visa’s multi-layered approach is Visa Token Service, which replaces the traditional 16-digit primary account number (PAN) with a digital “token” for online purchases and transactions initiated with mobile devices. Visa is working to bring tokenization to eCommerce, which will provide added security to online transactions by removing cardholder information from the merchant environment.
Visa’s research is part of its ongoing efforts to support governments across the world move to cashless societies and achieve their visions of creating smart cities, and builds on similar initiatives in the UAE and South Africa in previous years.
About the study
A total of 600 people in Saudi Arabia, comprising both citizens (45%) and expat residents (55%), were interviewed for 15 minutes each in early 2017 by 4SiGHT Research & Analytics. Respondents lived in Riyadh (38%), Jeddah/Mekkah (26%), Dammam/Khobar (15%), Asir/Abha (3%), Jizan (2%) and other cities, with each having at least one payment card.
About Visa Inc.
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit www.visamiddleast.com, visanewsmena.tumblr.com or follow us on Twitter @Visamiddleeast