Indian Consumers More Concerned About Digital Payments Fraud Due to COVID-19 Compared To Last Year – New ACI Worldwide Study
June 08 2021 - 1:30AM
Business Wire
71 percent of consumers are more concerned
about scams and fraud because of COVID-19, up from 47 percent at
the onset of the pandemic a year ago
Consumers in India are increasingly concerned about digital
payments fraud and are exercising greater caution when using
digital payments compared to a year ago, according to a new study
conducted by YouGov and ACI Worldwide (NASDAQ: ACIW), a leading
global provider of real-time digital payment software and
solutions. While survey respondents perceived net banking to be the
most secure method of payment, UPI and eWallet transactions scored
higher than card payments — both for online and offline usage —
suggesting increased trust in digital payment methods. 71 percent
of consumers said they are more concerned about scams and fraud
because of COVID-19, rising from 47 percent last year at the onset
of the pandemic.
60 percent of respondents would first call their bank to block
their account or visit the bank branch to file a written complaint
in the event of fraud, indicating that banks continue to be the
first point of contact. While this has dropped slightly from 68
percent last year, only 16 percent would first report fraud
activity to police or a cybercrime unit, while only 5 percent would
turn first to public social media channels.
When it comes to the potential fraud risks while transacting via
UPI or eWallets, almost half (49%) of consumers are most concerned
about fake UPI payment links that ask for money transfers via text
or email. This can be attributed to a spike in incidents over the
past year where fraudsters have duped users with payment requests
citing donations for the PM CARES Fund, contributions to NGOs and
crediting income tax refunds, among other scams. Additionally, 30
percent are concerned about their personal data being leaked due to
data breaches, which suggests that consumer attitudes mirror the
RBI’s concerns with respect to storing card details; this can be
circumvented through banks’ deployment of a standing instructions
(SI) hub.
On a positive note, the efforts of Indian authorities to
encourage digital payments have been lauded, with nearly 8 in 10
(78%) consumers agreeing the government should continue to promote
them to maintain safety and social distancing measures during the
pandemic. Usage continues to rise, with digital payments via
eWallets and UPI being used at least once per day by 37 percent of
consumers, second only to cash (52%) and rising from 29 percent
just six months ago. This signifies increased “stickiness” of
digital payments, mirroring the ongoing meteoric rise in UPI
transaction volumes.
Further, 77 percent of consumers believe merchants and retailers
are now more open to digital payment methods and encourage their
use, compared to pre-pandemic, indicating that COVID-19 has
accelerated both consumer adoption and merchant acceptance.
Concerns regarding limited merchant acceptance have dropped to 13
percent compared to 19 percent last year and 23 percent in a
similar ACI survey from October 2019.
“The pandemic has been a major catalyst for the adoption and
growth of digital payments in India, but transaction growth has
been accompanied by the emergence of payments-focused scams, with
many first-time users targeted by fraudsters,” said Kaushik Roy,
vice president and head of product management, Asia, Middle East
and Africa, ACI Worldwide. “Consumers are overwhelmingly welcoming
of the steps taken by authorities towards digitization in payments
and acknowledge the efforts made by banks concerning consumer
awareness of payments fraud. That said, banks will need to continue
to lead the way by not only deploying modern and robust
enterprise-level fraud management, but also by increasing consumer
awareness.”
Other key findings and trends:
Payment behaviors and spending patterns
- While approximately a third (31%) of consumers use cash more
than once a day, digital payments via eWallets and UPI are not far
behind for high-frequency usage, with 1 in 5 (20%) using more than
once a day.
- Only 6 percent in tier 1 and metro cities (Mumbai, Delhi NCR,
Chennai, Kolkata, Bangalore and Hyderabad) have never used eWallets
and UPI, suggesting near ubiquity in cities.
- 6 in 10 (61%) use eWallets and UPI at least 2-3 times a week,
not far behind cash (69% using 2-3 times per week or more).
- Only 8 percent find digital payments inconvenient compared to
cash.
- 75 percent said that compared to when the pandemic started, it
is now easier to use digital payments (including UPI and
eWallets/digital wallets) when making purchases in-store or at
merchant locations, and at more locations.
- 70 percent feel that their bank and the authorities are doing a
good job of educating them and the wider public about the potential
dangers (fraud) of digital payments and how to keep personal data
safe.
Fraud and payments security
- Vulnerability to fraud remains the biggest consumer concern
when it comes to digital transactions (42%), followed by privacy of
data (36%), failed transactions (36%) and internet connectivity
(33%).
- Net banking was perceived to be the most secure method of
payment (30%), followed by UPI wallet transaction in-store (23%),
online transaction through UPI/eWallet (22%), online credit/debit
card payment (17%) and swiping card at POS (16%).
- In terms of awareness levels for various anti-fraud mechanisms
deployed by banks, there’s maximum awareness for one-time
password/OTP (66%), followed by SMS/email notifications (58%),
Personal Identification Number/PIN(52%), two-factor
authentication(49%) and PIN shield(37%).
- When asked about digital payments fraud via UPI or wallets,
consumers cited the following as concerns:
- Fake UPI payment links that ask for money transfers via text or
email (49%)
- Fake apps/fake websites which look authentic in design
(47%)
- KYC update – where they receive fraudulent SMS or calls asking
to update bank KYC (46%)
- Password fraud – where their password would be easy for a
hacker to guess (42%)
- Phishing and vishing – where they get a call/text from a person
pretending to be a bank or card representative to disclose personal
details and/or card number (42%)
- Malware/spyware – where they download infected software or
viruses (32%)
Methodology: All figures, unless otherwise stated, are from
YouGov Plc. Total sample size was 1,001 adults. Fieldwork was
undertaken between May 18-23, 2021. The survey was carried out
online. The figures have been weighted and are representative of
all Indian adult respondents (aged 18+) in the following Tier 1
metro areas: Mumbai, Delhi NCR, Chennai, Kolkata, Bangalore,
Hyderabad.
About ACI Worldwide ACI Worldwide is a global software
company that provides mission-critical real-time payment solutions
to corporations. Customers use our proven, scalable and secure
solutions to process and manage digital payments, enable
omni-commerce payments, present and process bill payments, and
manage fraud and risk. We combine our global footprint with local
presence to drive the real-time digital transformation of payments
and commerce.
© Copyright ACI Worldwide, Inc. 2021 ACI, ACI Worldwide, ACI
Payments, Inc., ACI Pay, Speedpay and all ACI product/solution
names are trademarks or registered trademarks of ACI Worldwide,
Inc., or one of its subsidiaries, in the United States, other
countries or both. Other parties’ trademarks referenced are the
property of their respective owners.
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Dan Ring dan.ring@aciworldwide.com +1 (781) 370-3600
Christopher Taine christopher.taine@aciworldwide.com +49 (0) 89
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