New research from Visa reveals that over 41% of small- to medium-sized businesses (SMBs) in the UK have fallen victim to fraud, incurring an average loss of £3,808 in the past year.
With SMBs comprising 99.9% of UK businesses – a staggering 5.6 million enterprises – the findings underscore the potentially devastating financial and operational toll of fraud on both businesses and the economy.
Visa’s survey highlighted the most prevalent fraud types experienced by SMBs, including billing and invoice fraud (26%), phishing scams (24%), and bank account hacks (23%).
Beyond financial losses, the emotional and operational impacts are significant:
- Eroded Trust: Over a quarter (28%) of SMB decision-makers who faced fraud expressed diminished trust in third parties.
- Personal Financial Strain: 22% noted a direct impact on their personal finances.
- Confidence and Mental Health: Nearly three in ten (29%) admitted a loss of confidence in decision-making, while 20% reported mental health challenges as a result.
This loss of confidence can have long-term effects, causing business leaders to second-guess their decisions and hindering growth ambitions.
The consumer response to fraud further exacerbates its economic repercussions.
Visa data shows that following a fraud event:
- 91.2% of affected consumers reduce spending, with average spending dropping by 46.2%.
- 6.4% cease making purchases altogether, creating ripple effects for businesses reliant on steady cash flow.
This shift in consumer behaviour highlights the critical role of trust and security in sustaining business operations and consumer confidence.
“Small businesses should not be held back by fraud,” comments Mandy Lamb, Managing Director of Visa UK & Ireland. “We invest heavily in technology to safeguard small businesses, levelling the playing field between small and big businesses online.”
Visa’s proactive measures, including £8 billion invested globally in fraud prevention over the past five years, have prevented an estimated £30 billion in global fraud.
Advanced tools like AI-driven RTP Protect technology are further enhancing fraud prevention, securing account-to-account payments, and fostering a safer digital economy.
Source: Payments Cards and Mobile
