E-commerce took off when the pandemic struck.(ecommerce payment solution)
Online shopping appeared to be the only way out for those who were confined and had nothing to do. The size of the world’s online market increased to $26.7 trillion. Customer behaviors were also evolving. 60 percent of participants in one survey agreed that COVID-19 had altered their relationship with technology.(ecommerce payment solution)
However, more than just sales were surging. Businesses in the e-commerce sector weren’t the only ones working hard; fraudsters were as well.
Ecommerce fraud increased 18% in just one year (2020–2021), from $17.5 billion to $20 billion. When compared to the similarly booming ecommerce fraud protection market, which is predicted to reach a staggering $70 billion by 2025, it is obvious that this “job” is only going to become more and more in demand.
The final word? Ecommerce fraud is a problem that you cannot afford to ignore. After all, it poses a threat to both your brand’s reputation and profitability. Customers won’t trust you if they don’t feel like they can make a safe payment through your website. It’s quite challenging to regain that consumer confidence once you’ve already lost it.
The situation of payment security in 2022 will be explained below, starting with the most typical types of e-commerce fraud. Additionally, we’ll provide practical guidance for safeguarding your clients, your website, and ultimately your bottom line. Read on!
Most Popular Ecommerce Fraud Types(ecommerce payment solution)
The bad guys in the realm of e-commerce are growing and changing as well. Therefore, during the past few years, more fraudulent transactions have occurred, and the overall worth of the stolen goods has increased. It is a specific kind of online fraud.
Pharming, account takeovers, “friendly” and “silent” fraud, as well as outright identity theft, are just a few of the more dynamic and varied techniques used by fraudsters. Let’s look at a couple of them.
Pharming(ecommerce payment solution)
Pharming is a sort of e-commerce fraud in which scammers trick people into visiting a fake website without their knowledge or agreement. This website may have the same appearance and feel as the one the consumer was trying to access, but it is fundamentally different in that it is a total hoax.
The purpose of the fake website, which was created solely to mimic the real one, is to deceive users into providing their personal information and credit card information. Then, fraudsters can exploit this information to steal the person’s money or, worse yet, their identity.
False chargebacks(ecommerce payment solution)
Chargeback fraud, also referred to as “friendly fraud,” is when a client makes a false request for a refund by manipulating the chargeback system.
A chargeback is a measure that banks first implemented in the 1970s to increase consumer confidence in credit cards (which, at that stage, was a new-fangled thing). It enables customers to contest a card payment and then get a refund if the bank agrees with them.
Imagine your card is taken at the airport as you are traveling to Santorini for a vacation. By the time you get in Greece, you discover that the fraudster spent $700 on your card. You could (very reasonably) ask for a chargeback in this circumstance.
The issue? when it is not lawful. Fraudsters can use the chargeback procedure to obtain money back on completely legitimate purchases, whether they are doing it on purpose or “innocently” (customers forgetting about a transaction on their account or a recurrent payment cycle).
What’s worst? that if a chargeback claim is accepted by the bank, the bank will then demand payment from you in addition to charging a fee for their trouble. Chargebacks are a very real threat when you consider that you have already lost merchandise to the fraudster.
Theft of identity
Identity theft is one of the most well-known sorts of ecommerce fraud due to well-liked films dealing with the topic (The Talented Mr. Ripley, anyone?). However, that does not lessen its hazard.
Here, a fraudster uses another person’s name, identity documents, and personal information to open credit cards before going out on the high street.
Why is this unfavorable news for your internet business in addition to the effects on the victim? You are still selling, after all.
Wrong. Recall our earlier Santorini example for a moment. The individual whose identity was stolen will, undoubtedly, file a chargeback quite soon after becoming aware of the long list of fraudulent purchases made in their name. The bank will be requesting the money back from you if it upholds this.
Identity theft is by far the most prevalent kind of ecommerce fraud, accounting for 71% of all incidents. Fraudsters are a threat to be aware of since they are developing their skills and are now exploiting the personal devices, IP addresses, and user accounts of their targets to assume their identities.
Takeovers of accounts
All of our customers have done it at some point or another while purchasing online. checked the “Save My Credit Card Details” box. It’s a no-brainer because it will save them a minute the next time they return to make a purchase.
Right. Unless a scammer manages to get their sticky fingers on that customer’s login information, that is. If that occurs, the thief will have easy access to their payment information. In other words, all they need to do to start buying is modify the shipping address.
And after that? Be prepared for chargebacks from the actual consumer, which will cost your company money.
Ransomware and malware
Does your computer frequently crash? Are advertisements appearing everywhere? Do links lead you in the incorrect direction, or have new icons started to show on your browser and desktop?
If so, there’s a chance that you unintentionally downloaded malware (mal = bad, ware = software; this is nasty software) onto your computer. There are many different dangerous code kinds, each more evil than the previous, even within the name “malware” itself. These include malware like as spyware and “Trojan Horses” as well as ransomware, which prevents you from using your computer unless you pay the hacker a “ransom” to gain access.
The issue for proprietors of e-commerce stores is that malware can take important data from your system, that of your customers, or that of your admins. Your clients’ names, addresses, and payment information are all included in this. If any of that is compromised, you won’t only lose money or data; your credibility will also be at risk.
Furthermore, virus attacks open the door for “silent” fraud, a new type of ecommerce deception. Fraudsters steal a few cents after using malware to get unauthorized access to several accounts; they don’t steal thousands, hundreds, tens, or even ones. These thefts, when carried out frequently and in volume, can result in enormous sums of money being lost. After all, not that “quiet”!
How to Protect Your Clients
It is one thing to be aware of the prevalent e-commerce fraud in 2022. But being able to successfully protect you and your clients from the negative impacts of fraud is quite another.
We’ve compiled our best advice for keeping you, your clientele, and your company out of scammers’ greedy grasps below.
Protection of Customer Information
What is the first strategy to safeguard your clients? protecting their most sensitive information. This is how:
Firewalls
Firewalls help maintain the security of your website by filtering and keeping track of incoming (and outgoing) data. They essentially serve as a physical barrier between your network and the internet’s uncharted territory.
According to this perspective, firewalls are essential for ensuring PCI compliance as well as for protecting your data systems. All establishments that accept credit and debit cards are required to go by the PCI DSS (Payments Card Industry Data Security Standards) rules. Your clients, regulators, and the general public may see that you can be trusted to manage sensitive data by looking for PCI compliance.
With Ecwid by Lightspeed, you can sell online with a PCI DSS-compliant store. Ecwid by Lightspeed is a Level 1 Service Provider with PCI DSS validation. The highest international standard for safe data transfers for online shops and payment platforms is represented by this.
Make Two-Factor Authentication available (2FA)
Make sure 2FA is activated so anyone attempting to access the backend platforms and procedures of your company will have to log in using two devices. For example, if you or a team member is trying to log in from a desktop computer, you’ll also need to confirm the attempt on a different device, such your phone.
Source: ecommerce payment solution , ecommerce payment gateway
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