The Final Frontier – How E-commerce Fraud Prevention Software Helps Defeat Hackers?

Every internet user should be concerned about security. Online sellers and vendors are constant targets of hackers. Data and money theft impact both their business and their customers. But, is the online vendor community ready to fight this battle against hackers that seems to get more challenging every year? 

Understanding E-commerce Fraud 

Hackers and data thieves update their methods every year. If vendors keep failing to update their security measures, they will suffer $25 billion in losses by 2024 because of online payment fraud. In four years, vendors will witness a 52% increase in losses if they keep tailing the enemy and don’t take a proactive approach. The key to beating these hackers is understanding them.

Here are the most common types of e-commerce fraud – 

· Chargeback Fraud – Chargeback fraudsters target vendors whose websites have very poor security measures. They exploit the substandard payment method to order multiple items quickly. Upon shipment, the customer keeps the products. When the ‘last day to return products’ arrive, they make a refund request claiming identity theft. If their complaint is successful, they receive a free product. Even if it’s not, eCommerce vendors still have to overspend on refuting the chargeback claims. 

· Triangulation Fraud – Hackers first create fake online stores (copies of actual e-commerce websites). All the visitors to these platforms have their data stolen. If users place orders, they are sent to the actual online stores. The online stores receive payments from stolen credit card data.

The hackers keep the shopper’s money. Before any party notices, the hacker secures user data and the payment from the customer. In such situations, eCommerce platforms will have to return the money taken from the stolen credit card. They may also have to incur a double loss if the original shopper decides not to return the product.  

· Identity Theft – Hackers assume another user’s identity to either steal private data or commit fraudulent transactions on online retail stores. Both the e-vendors and the customers are at risk. Although the customer makes the initial payment, he or she may claim chargeback upon realizing the theft.

This leads to chargeback difficulties for the vendors. In some cases, even merchants can have their identities stolen. Their digital platforms are then used to commit more fraudulent activities.

· Credit Card Not Present Fraud – Fraudsters steal other users’ credit card data (account number and pin code) to make fraudulent transactions or purchases. There’s no physical credit card involved in the process, so these frauds are called ‘card not present’ frauds. 

Customers may ask vendors for refunds. Hence, vendors bear the brunt of the losses. Vendors that aren’t compliant with the payment card industry data security standards face the most risk of being successful targets of such frauds. 

· Taking Over User Accounts – Hackers take over user accounts to make fraudulent transactions. The main motive of account takeovers is a financial benefit. Any private user holding an account on a payment platform is technically at risk of such a fraud. Companies and vendors who offer ‘one-click payments’ on their websites need to manage their membership systems better. 

· Hacking – Although the tools of hackers have changed over the years, the fundamentals of the process are still the same. Typically, in e-commerce hacking scams, hackers exploit the platforms or computer systems of online sellers. 

Consumers who use smartphones or tablets to shop on vulnerable websites are at-risk. Hackers exploit the substandard security systems on the gadgets and the e-commerce platform. 

Preventing Fraud – The Final Frontier 

Even normal users are engaging in chargeback fraud. They ask their friends to steal the packages delivered by an online vendor. Then, they claim ‘stolen package’ or ‘failed delivery’ to request a chargeback. For vendors, these problems are not going away soon unless they take these concrete steps – 

· Team up with reliable Third-Party Payment Service Providers (TPPs). 

· Attain PCI-DSS Compliance. American vendors can guarantee secure online payments if they are compliant with the Payment Card Industry’s (PCI) security requirements. Similarly, vendors dealing in the EU region need to be PSD2 compliant. 

· Get Expert Help – While in-house cybersecurity teams deliver dedicated services, they don’t possess the expertise that independent cybersecurity experts offer.

· Invest in Fraud Protection Software – The final solution to detecting high-risk or potentially fraudulent transactions is using a high-quality eCommerce fraud prevention software. These tools help e-commerce stores stay active and secure 24/7 by assessing and addressing risk factors. They instantly report fraudulent activities on the store so that sellers can take pre-emptive security measures. 

Make it Or Break It

73% of organizations involved at the helm of e-retail cybersecurity think strong cybersecurity is the key to long-term success in the online retail industry. Bear in mind – these are the top players, not emerging businesses. 

Hence, vendors mustn’t waste any time and install fraud protection software on their platforms immediately. The volume of high-risk transactions increases during sale seasons. Delays or repeated attacks can cost vendors their livelihood.