New research from Visa has uncovered the alarming scale of fraud impacting small-medium businesses (SMBs) in the UK.
The study shows that over two fifths (41%) of SMBs have fallen victim to fraud in the last year, with the average financial loss per business amounting to £3,808.
With SMBs comprising 99.9% of the UK’s 5.6m businesses, the financial repercussions of fraud extend beyond individual companies, highlighting a wider risk to the UK economy.
The survey identified the most common types of fraud faced by businesses as billing and invoice fraud (26%), phishing scams (24%), and bank account hacks (23%).
The impact goes beyond finances, affecting decision-makers’ confidence, trust in third parties, and even personal well-being. Nearly three in ten (29%) SMB leaders reported that fraud negatively impacted their confidence, while 20% admitted it had an effect on their mental health.
Fraud also poses challenges for SMB growth. Consumer confidence in transaction security emerged as a critical factor in driving online purchases.
While price is the top consideration (62%), transaction security (48%) ranked ahead of ease of returns (29%) and customer reviews (27%). This underscores the importance of robust fraud prevention strategies for sustaining customer trust and business growth.
Visa’s report also highlights the broader economic impact of fraud. Data shows that after experiencing fraud, consumer spending patterns shift dramatically, with 91.2% spending less and 6.4% halting purchases entirely. On average, consumer spend decreases by 46.2% in the six months following a fraud incident.
In response, Visa has launched a digital toolkit aimed at empowering SMBs with knowledge and practical solutions to combat fraud. Mandy Lamb, managing director of Visa UK & Ireland, stated, “Small businesses should not be held back by fraud. We already invest heavily in technology to safeguard small businesses – in effect levelling the playing field between small and big businesses as they trade online. This toolkit is part of our commitment to support them to safely manage their business and serve their customers in a digital world. Customers should feel safe in the knowledge that when shopping at businesses big or small, paying securely with Visa can help protect them against fraudsters. If things go wrong, Visa is there to help put things right and work with customers to get their money back.”
Visa’s ongoing investment in fraud prevention exceeds £8bn globally over the last five years, enabling innovations such as AI-driven RTP Protect technology. These efforts have contributed to fraud rates on Visa’s network being among the lowest across payment methods, with £30bn in global fraud prevented last year.
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