Fraudsters eye each online presence of businesses and try breaching into their website for two common online frauds, namely account takeover and identity theft. None of the e-commerce platforms is considered to be fully protected from fraudulent activities.
However, during the website or ecommerce development by Brainvire, a developer should make sure to implement effective fraud prevention strategies.
Types of E-commerce Frauds
According to the Association of Certified Fraud Examiners, all the small and big enterprises are under continuous threat of privacy breach and security issues.
Hacking, phishing, unauthorized payment options, and identity theft are some of the common internet fraud happening to the websites. However, in e-commerce, the frauds are more resilient and difficult to get over.
- Account Takeover – Account takeover or identity theft is a very common e-commerce threat. The hackers get unauthorized access to the payment options saved by the customers and recreate an account to pose as a certified buyer. Thereafter, account activities are taken over and are being corrupted.
- Fraud of Interception – Hackers steal credit card information and create illegal orders from the forbidden account and pose as the recipient to get the orders delivered to their doorsteps. The owner of the credit card falls into the trap of inception fraud.
- Triangulation Fraud – Triangulation fraud involves three parties – the e-commerce platform, legitimate shoppers, and hackers. The hacker creates an online store for fooling shoppers into investing over them.
E-commerce Development in Fraud Prevention
Fraud prevention is a significant process for e-commerce development. As the organizations will have different verticals to focus, the security and privacy options are most neglected. However, during the e-commerce platform development, the organization should collaborate with the developer to induce the following solutions:
- Address Verification System – The e-commerce software developers include an address verification system when the website is developed. This highly efficient system helps to verify the billing address provided by the customer with the original address provided by the credit card facility.
- Standards of Payment Card Industry – A software developer should follow the pre-set guidelines and standards of the payment card industry. It protects e-commerce platforms from frauds and hacking related to credit card payments.
- Complicated Password and Authentication – The online store should be set up cautiously as the backend developer should ensure a customer can sign in with an active email address and mobile phone. A complex password requirement should be mandatory, along with two-way authentication, can be applied.
- Chargeback Prevention – There are many different kinds of chargeback techniques that can be incorporated into the e-commerce platform with the help of efficient developers.
When an online purchased item is declared to be defrauded, the merchant is held responsible. And if the merchant fails to prove the authorization of the transaction, the total amount is refunded back to the customer, making the merchant suffer the loss.
All these valuable tools and features must be incorporated into the online store during the phase of e-commerce development. All the development features will not guarantee restriction of fraudulent activities, but will ensure that the e-commerce site is safe from meagre hacking trails and the developers can easily detect phishing activities.
Along with the above-mentioned software features, an e-commerce platform should incorporate some important tools and techniques for fraud prevention.
Fraud Prevention Tools and Techniques
Most of the online businesses suffer from financial losses from cyber attacks. The phishing and hacking activities harm the goodwill of big e-commerce giants. It is important to adhere to best practices and compliance in order to protect an e-commerce store from fraudulent activity.
- Follow DSS Standards – Data Security Standards guides the principles laid down by Payment Card Industry for the e-commerce businesses globally.
They guide in storage, processing and transmission of the information for credit card payments under a secure environment produced by the e-commerce developers.
- Certified SSL – SSL certifies an e-commerce platform as authentic and helps to transmit the encrypted data. It validates the various options in the payment gateway with online address verification services.
- Verification of IP Address – The IP addresses of the customers should be verified as and when the customer is opting for a credit card purchase.
When an unknown location or proxy is being detected, the payment gateway should forcibly stop the further payment process, and the e-commerce platform should be warned about the authentic purchase trials.
- Fraud Filters – There are many tools being declared as the most useful fraud filters that protect online businesses from payment-related frauds.
Some of the noteworthy fraud filters are purchase amount filters, velocity filters, filters to track CVV – card verification value, and address verification services. All these tools enable authorized purchase being conducted from stolen or hacked credit cards.
Most of the online businesses worldwide are suffering from financial losses from cyber related attacks. The phishing, hacking and other illegal activities are the main reason for these losses. It is equally important to adhere to the best security practices and compliance in order to protect an online business from many kinds of fraudulent activity
Generally when we think about general security we think in absolutes. We expect our locks to protect us, every time. We expect our security alarms to warn us of intruders. It’s equally important to consider cyber security measures that combat various fraud in a similar way.
Legitimate transactions that create a “false positive” can be even more costly than actual fraud. When any legitimate order is inadvertently rejected, that customer isn’t going to be happy about it. This also led to a decrease in trust among the prospect customers for their preferred Brands. So you must focus on cyber security for your business.
Security and privacy are the two major concerns for any e-commerce platform. Due to the highly versatile and dynamic nature of the online stores, businesses neglect the importance of fraud prevention.
Therefore, some anti-fraud features should be incorporated during software development, and the e-commerce giants must implement tools and techniques for ensuring strong protection.