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Press Release

Small businesses put off engaging in e-commerce

14 August 2007

The Federation of Small Businesses (FSB) has highlighted the significant numbers of small and medium sized enterprises (SMEs) being deterred from e-commerce, following a report by the House of Lords Science & Technology Committee. Despite the fact that the geographical reach of the Internet makes it possible for SMEs to compete in the global market at low cost, just 18% of SMEs are selling on-line. Less than one percent of those derive all of their sales through the Internet.

The risk of credit card fraud is a significant concern to 19% of businesses, yet only 6% have actually experienced on-line credit card fraud.

Recent recommendations made in a report on Personal Internet Security by the House of Lords Science & Technology Committee, many of which are backed by the FSB, include increased research into e-crime as well as e-crime victims having the opportunity to report Internet crime to the police and to receive a crime number in return, just like any other type of crime.

The FSB supports work to establish a national e-crime co-ordination unit with the Metropolitan Police and applauds efforts by organisations such as GetSafeOnline to engage with small and micro-businesses.

The FSB also supports recommendations for legislation that banks should take some responsibility for losses incurred as a result of electronic fraud. Many small businesses and online retailers are caught by charge-backs from card fraud which they often receive months down the line, even after they think a transaction has been successfully processed.

David Croucher-Jones, FSB Home Affairs Chairman, said:

“The extent to which the UK’s SME sector is engaged in e-commerce is an issue of considerable economic significance. We applaud the Lords Committee for having highlighted and recommended proposals that are essential to Internet trade moving forward – but recommending and doing are two different things.

“E-crime needs to be given the same status as crime that is committed against a bricks and mortar business. Only when this is accomplished, by implementing the Lords recommendations, can more small businesses benefit from having a stronger online presence. Customers will also benefit from the increased choice and convenience that online security can bring.”



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Federation of Small Businesses

Federation of Small Businesses

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