How UK small and medium businesses can take the fight to fraud

Fraudsters in the UK have stepped up their game to target businesses through a range of highly sophisticated attacks, resulting in huge amounts of lost revenue. With SMBs making up 99.9% of the business population (5.6 million businesses)¹, new Visa research² amongst UK SMB decision makers has highlighted the devastating financial impact on businesses and the UK economy, while exploring some potential ways small businesses can stand up to fraud.

The study found that two in five UK SMBs have lost money to fraudsters in the last year, with the average amount lost being almost £4,000. The most common types of fraud reported were bank account hacks, billing and invoice fraud and phishing scams, demonstrating the numerous ways business owners can be targeted. Given the personal investment often required for small businesses, owners were often hit themselves, with over a fifth saying it impacted their personal finances too.

The survey also found that fraud can have a detrimental impact on SMBs’ ability to grow their business with consumers placing a high premium on security. After price of goods and services, transaction security was cited as the most important factor for shoppers when deciding whether to make a purchase of goods or services online, following the ease of returns and refunds and customer reviews.

The impact of being a victim of these types of fraud is not just financial, it can take a toll on an individual’s mental health while knocking confidence. More than a quarter who have experienced fraud felt less trusting of third parties as a result and almost three in ten said it knocked their confidence as a decision maker. One in five said that it impacted their mental health and a similar proportion said that it has made them second guess business decisions that they make.

Further data from Visa highlights the impact of fraud on UK consumer spending and the economy. In the following six months after reporting fraud, there is a remarkable impact on the affected cardholder’s spending:

• 91.2% of consumers spent less  
• 6.4% didn’t make any purchases
• On average, consumer spend drops by 46.2% after a fraud event

According to the latest fraud report from UK Finance , £1.2 billion was lost to fraud in 2023. As fraud attacks become increasingly sophisticated, innovative solutions are needed to better protect consumers’ personal and financial information. Education is key here, with 40% of SMBs saying they wanted anti-fraud training and almost three quarters agreeing that improving digital capabilities are the most effective methods for preventing fraud.

With a track record in globally upskilling SMBs, Visa has gone one step further with the launch of a digital toolkit. The toolkit is designed to help SMBs understand the different types of fraud that threaten small businesses, with practical tips to help keep their business and customers secure.

Visa has been at the forefront of fraud prevention for decades, investing £8 billion globally to reduce fraud and enhance network security over the last five years. Last year, Visa proactively prevented an estimated £30 billion in global fraud⁴, contributing to the network’s fraud rates being the lowest rates of any payment method. To further support the UK in the fight against fraud Visa is introducing a range of innovative technologies and using Visa’s AI-driven RTP Protect technology to fight fraud on account-to-account payments.

Explore Visa’s new fraud toolkit for SMBs here.

Case studies, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. does not make any warranty or representation as to the completeness or accuracy of the Information within this document, nor assume any liability or responsibility that may result from reliance on such Information. The Information contained herein is not intended as legal advice, and readers are encouraged to seek the advice of a competent legal professional where such advice is required.