2020 was a landmark year for eCommerce. Although the surge in online shopping occurred due to the pandemic that devastated the world, it has also provided a lifeboat for businesses to stay afloat during incredibly turbulent times. Brick and mortar stores continued selling their products through online platforms and other businesses provided their services online, preventing them from closing forever.
Unfortunately, the upward cycle in online activity has also led to a sharp increase in fraud. Data from Juniper Research estimates that eCommerce fraud will rise to over USD 20 billion in 2021 from USD 17.5 billion, with fraud growing by 18 per cent every year. With more and more card-not-present (CNP) transactions taking place, eCommerce will continue to be a fraud site unless they work with business IT solutions to implement security measures. Here’s what you need to know.
Types of eCommerce Fraud
There are a few types of eCommerce fraud, all of which occur when someone makes a transaction using an invalid or fraudulent payment method. Chargeback fraud is one of the most common forms. This happens when someone purchases a product or service, receives it, then initiates a chargeback with the claim that they never received what they paid for or they never made the purchase at all.
Another type is identity theft. A hacker or criminal uses stolen information to purchase a product or a service, inputting someone else’s credit card or payment details. Since the card number matches with the customer data, the transaction seems innocuous. However, it is revealed only when the cardholder sees it in their account. Apart from the merchandise cost, the business must refund the cardholder.
Email phishing is when a customer receives an email that resembles a legitimate email regarding an order or delivery confirmation. However, when they click on the link to view the package’s tracking, the webpage infects their device with viruses or malware.
Lastly, pagejacking happens when a customer visits your website to purchase but never receives the product. When this happens, they may have visited a fake website designed to pose as a legitimate business and steal information.
Signs That Indicate a Fraudulent Transaction
Business owners must be vigilant for signs of a fraudulent transaction, as you’ll need to look out for both your customers and your company’s security. Typically, seeing these signs indicates fraudulent activity, requiring another review. Here are the signs to watch out for:
- New customers
- Customers from countries you usually do not transact with
- Surprisingly large orders
- Numerous transactions made using the same card in a brief period
- An IP address that doesn’t match the billing or shipping address
- Many payment cards from the same IP address
It will also help, if you engage a credible IT company to review your protocols and ensure you have tight security policies to prevent such fraud.
How to Prevent Fraud
Fortunately, you can do a few things to prevent you and a customer from becoming a victim of eCommerce fraud. For starters, use a credible entity to process your payments, such as those with PCI DSS compliance. Enable fraud tools on your website, such as card security codes and Address Verification Services, which matches the billing address on file for the card with the billing address entered into the checkout page by the customer. It is also recommended to use Secure Server Layer (SSL) certificates to keep customer data secure. If you have CNP transactions and the customer is picking it up from your store, check their ID to ensure it matches the card they used.
As technology grows more sophisticated to offer a world of convenience to society, so does hackers and cybercriminals. By being aware of eCommerce fraud and working with IT specialists, you can protect your business and customers from such malicious activity.
IQPC is the leading IT support company in Perth, delivering top-tier cybersecurity and technology solutions. Our services include IT management, consulting, hardware and software, and many more with packages to support a range of small businesses. Contact us today for a free business IT review!