E-commerce has revolutionized how we shop. A few years ago, you wouldn’t have imagined that you could shop for shoes, clothes, bags, accessories, and gadgets while at home or in your office. Unlike other methods of shopping, e-commerce is the most convenient. As an e-commerce store owner, you’re able to reach more customers, cover a wider territory, and you don’t need to have a physical store.
Indeed, e-commerce has several benefits. However, just like any other business, e-commerce is not without risks. One of the main challenges facing this brilliant sales platform is fraud. According to the ACFE (Association of Certified Fraud Examiners), almost 50 percent of small e-commerce businesses have fallen victim to fraud which costs approximately $114,000 per occurrence.
1. Comply with PCI Standards
This is something that you should already be doing. PCI (Payment Card Industry) has detailed security standards that you should follow. These standards also go a long way to securing transactions. Additionally, there are direct consequences of not adhering to these standards. You may be vulnerable to lawsuits if you fail to comply with the PCI security standards. Credit card companies may also decide not to work with you which may bring your business to a halt.
2. Utilize CVV and AVS Verification Technology
Card Verification Value or CVV is the three digits on the back of your credit card. Your e-commerce platform may already have this system configured. CVV is one of the best ways to prevent fraud from criminals who have stolen credit card numbers and not the CVV.
The Address Verification System (AVS) works a bit different from the CVV. Customers cannot see this on their end. This system works by checking that the billing address matches that of the credit card. For example, a fraudulent person will purchase a product from your e-commerce store and send the product to their address. However, the stolen credit card will have another person’s address and this will warn you before completing the transaction.
3. Insist on Strong Passwords
We’ve all set up an online account at one time and became frustrated due to the strict password requirements. However, by introducing such policies, you will cut down on your e-commerce fraud risks. Strict password policies protect customers as well as your business. A good smart password policy will include different characters and a minimum number of characters to make passwords hard to hack.
4. Monitor All Transactions and Chargebacks
Although you cannot fully prevent e-commerce fraud, you can minimize the damage it causes. You can do this by ensuring that you have a hosting provider who can monitor all transaction on your behalf and identify suspicious activities. Set up a system that can flag fraudulent activities such as billing and shipping addresses that don’t match, or multiple orders placed by the same user but with different credit cards.
Also, create a system that will alert you whenever there is a chargeback. In case the chargeback is for a purchase that you haven’t shipped out yet, put a hold on the delivery until the issue has been resolved. If you determine that the purchase was fraudulent, you should cancel it immediately.
5. Identify the Device Being Used to Place Orders
The sort of device being used to place orders can help you to screen fraudulent activities more effectively. iPads, iPhones, and Android devices among others don’t have the same fraud profiles. Through device assessment, you will be able to determine whether it’s a bot or a human placing the order and flag malicious intentions by detecting anomalies associated with the account takeovers. Regardless of whether the identity and payment details are valid, devices identified as risky may increase risk in the overall transaction.
6. Use Fraud Protection that Combines both Human and Artificial Intelligence
It’s always a good idea to use a fraud protection system that combines both human experts and machine learning to detect and prevent fraud. Any additional information that you may gather to assist you in determining whether to either approve or reject an order is important.
A typical fraud protection company will employ advanced machine learning methods and human intelligence to scrutinize millions of transactions and identify fraudulent patterns. This means that artificial intelligence or AI isn’t enough on its own. A human element is necessary to calculate tolerance and risk levels on the flagged fraudulent patterns.
7. Get the Help You Need
Trying to protect your e-commerce business may take a lot of your time and effort. A team of qualified experts can help you protect your business and allow you to focus on other important things like sales and looking for new customers. Keep in mind that most fraudsters are tech savvy and they can easily bypass system security. Contact Wagento today for more information on how to protect your investment from fraudsters.