Cyber attacks cost the UAE retail sector millions in fraud, a new report by payments company Adyen revealed.
Both cyber attacks and data breaches combined, businesses in the retail sector incurred a loss of approximately AED11 million on average in fraudulent activity over the past year, the UAE Retail Report 2024: Balancing customer experience and business efficiency report said.
The research, carried out alongside the Centre for Economics and Business Research, estimated that 44 percent of UAE retailers experienced fraudulent incidents related to cyber attacks or data breaches in the last 12 months, marking an increase of 39 percent compared to the year before.
On an individual level, victims of payment fraud in the UAE lost an average of AED3,250 each – a rise of 270 percent year-on-year, the report said.
Payment fraud is defined as criminals stealing payment details such as credit card numbers or checking account information to make unauthorised purchases.
Despite growing concerns over cyber crime, 68 percent of UAE businesses said they have effective measures in place to prevent fraud.
However 29 percent of consumers now choose to shop at stores with higher security and 28 percent want companies to verify identities in multiple ways for online purchases.
“Fraud is a pervasive challenge for retailers, and today’s findings demonstrate how it can significantly impact profits,” said Roelant Prins, CCO, Adyen.
“Fraudsters are deploying more sophisticated methods when they attack businesses, including the application of AI, and it’s therefore critical to invest in the right defense mechanisms to protect the company and customers. There’s no single solution to fraud defense, as a strategy will need to be tailored based on the business model and platforms used to make sales.”
Prins added machine learning tools can spot genuine customers and fraudulent activity across sales channels in real-time.
The threat of fraud has also impacted consumer behaviour, with 22 percent feeling less secure shopping now compared to 10 years ago.
Over half of retailers are considering changing payment providers for improved fraud protection and 67 percent looking at compliance with new EU privacy regulations.
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