Research from Visa has revealed that more than two fifths (41%) of small-medium businesses in the UK have been victims of fraud, with the average amount lost to fraudsters in the last year sitting at £3,808.

With small-medium businesses (SMBs) making up 99.9% of the UK’s roughly 5.6 million business population, Visa said that the research highlights the potentially devastating financial impact of fraud on businesses and to the UK economy.

According to Visa’s survey of 1,000 SMB decision makers, bank account hacks (23%), billing and invoice fraud (26%) and phishing scams (24%) are the most common types of fraud reported, with more than a quarter (28%) of SMB decision-makers feeling less trusting of third parties as a result, and over a fifth (22%) reporting that fraud impacted their personal finances.

The research shows that fraud’s impact isn’t just financial, with almost three in ten (29%) saying it knocked their confidence as a decision maker, one in five (20%) saying that it impacted their mental health, and a similar proportion (20%) reporting that it has made them second guess business decisions.

Visa said that the findings also show fraud is having a detrimental effect on SMB’s ability to grow their businesses, with consumers placing an ever higher premium on security. 

In a concurrent survey of 2,000 UK consumers, transaction security (48%) came only behind the price of goods and services (62%) as the most important factor for shoppers when deciding where to spend their money.

Moreover, the data underscores the long-lasting effects of fraud on consumer habits. Within six months of experiencing fraud, 91.2% of affected cardholders reduced their spending, 6.4% stopped making purchases entirely, and overall spending fell by an average of 46.2%.

To help businesses curb the effects of fraud, Visa has launched a digital toolkit designed to help SMBs understand the different types of fraud, and with practical tips to help keep their business and customers secure. 

As well as well known types of fraud, such as phishing scams or ransomware attacks, the toolkit warns businesses about lesser known frauds, such as fraudulent chargebacks, card testing attacks, and skimming frauds.

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“Small businesses should not be held back by fraud,” said Mandy Lamb, managing director of Visa UK and Ireland.

“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. 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.” 

The latest figures follow news last week that the UK’s Financial Ombudsman Service has seen record numbers of complaints about fraud and scams this year, as well as Cifas, the fraud prevention service, revealing that £11.4 billion has been lost over the past year thanks to scams.