A thriving online store takes more than a cool website, high sales, and plenty of returning customers. You must be able to protect your business from criminals, whose hacking and fraud tactics constantly evolve.
Get to know what dangers e-commerce enterprises need protection from. Then, make a note of tools and strategies that can fortify your business and its security.
Threats That E-Commerce Enterprises Face
As SEON’s article on e-commerce fraud explains, fraudsters can exploit businesses in several ways, each one involving tricks and threats you should know about. In transaction fraud, for example, the bad actor makes purchases with a stolen credit card. As the seller, you lose a product and have to issue refunds or chargebacks. Too many of the latter can get your enterprise on a bank’s high fraud target list, which increases your transaction fees.
Triangulation fraud is even more complex and dangerous. A fake seller takes a customer’s money and, using a stolen card again, orders the product from your store and provides the customer’s details. By the time either legitimate party realizes that something is wrong, the fake seller has disappeared. Lost sales, chargebacks, and a damaged reputation ensue.
Account takeover, return, bonus abuse, and friendly fraud are other schemes to look out for. Even wardrobing fraud, where customers use and return clothing, cost retailers $1.89 billon per year, according to Retail Technology Review’s report highlighted by SEON.
Friendly fraud also brings in the possibility of innocent cases, where a customer genuinely didn’t intend to buy something or completely forgot about it. Take this into account when setting up your security measures.
While you don’t want to be among the 2.9% of brands that have orders turn into chargebacks because of friendly fraud, as Shopify’s crime and strategy statistics show, alienating innocent customers would be just as bad for your enterprise’s future.
Nonetheless, it is daunting to know that, according to these same statistics, 2021 saw online payment fraud cost the US e-commerce industry around $20 billion. In North America alone, the most prevalent fraud attacks involved card testing, friendly fraud, phishing and its variants, identity theft, and refund or bonus abuse. Enterprises deal with all of these threats, including loyalty fraud.
It’s not easy to protect yourself from criminals with these kinds of tactics, but it can be done. Consider Shopify’s other finding: the market value of e-commerce fraud detection will reach $69.13 billion by 2025. And enterprises are already dedicating 10% of their annual e-commerce revenue to managing payment fraud. There are steps you can take and tools you can use to keep fraudsters and other criminals at bay.
Key Protective Measures for E-Commerce Enterprises
Criminals use every available tool and technique to access and exploit businesses, from fake IDs and stolen bank cards to deepfakes, phishing, and hacking. Your security needs to be able to detect and prevent all such threats.
Here are the most essential processes to consider, whether you’re looking at dedicated suites or reliable SaaS products that include security features.
- Risk Assessment
As part of your risk management, you must be able to establish the goals and assets of your business. Then, recognize and analyze potential threats, as well as how resilient your system is to attacks, both stealthy and aggressive. Finally, arm your system with the right defences and regularly patch up vulnerabilities.
When it comes to evaluating threats, the risk assessment advice on understanding ecommerce includes creating a risk matrix and spending time to closely examine assumptive risks, not just operational. Market demand, site traffic, average sales, costs of marketing and website maintenance are assumptive risks that can impact your performance, operations, and exposure to fraudsters and hackers.
Additionally, data collection and analysis are the most important parts of risk management and all other security measures. Make sure your system can quickly gather, organize, and deliver the data you need at any given time.
- Advanced Security Checks
Multi-factor authentication (MFA), AI-driven fraud detection, and encryption are other processes your security will benefit from. Among Hostinger’s cyberattack protection insights is that MFA can block 99% of online threats, according to Microsoft. Utilizing artificial intelligence and machine learning boosts those odds even more.
Hostinger also brings up a great example of how damaging cybercriminals can be. The UK’s NHS was hit in 2017 by Wannacry ransomware. It cost the NHS around $113 million, while spreading to more than 150 countries and stealing $7.3 billion globally.
So, don’t underestimate bad actors. Set a data-driven foundation of security checks that verify identities and IP addresses, assess digital footprints, look up card BIN numbers, spot card testing attempts, and more. They help monitor suspicious activities without too much friction. For a more sophisticated system that detects and prevents fraud, add advanced solutions like those mentioned above.
- Building and Maintaining Customer Trust
Consumers are your greatest asset but also another factor that affects your safeguards. Besides implementing adequate security measures to protect your online store, do what you can to strengthen your ties with customers.
Their personal data and transactions must be safe from tampering. At the same time, they themselves should follow best practices for online security, since malware can just as easily come from a customer’s email or device.
- Regulation Compliance
The General Data Protection Regulation (GDPR), Payment Card Industry Data Security Standard (PCI DSS), and International Organization for Standardization (ISO) are a few of the mandates that your e-commerce business may need to comply with.
Check what applies to you and don’t deviate from it. Your enterprise will be safer as a result, not just from data breaches and other criminal activity, but from non-compliance penalties if and when your security fails you and your customers.
Knowledge and Careful Planning Ensure Protection and Success in E-commerce
Criminals can be ruthless, especially with smart tactics and technology at their disposal. The first steps to combatting them is to recognize the very real danger they present and learn all you can about their methods.
With this knowledge, assess how alluring your enterprise might be to bad actors, while also acknowledging its strengths and weaknesses, from its processes to its customers. Build a protective barrier around your online store that detects and counters threats without compromising its user-friendliness.
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