With the boom in eCommerce businesses, eCommerce fraud is also on the rise. Criminals and online fraudsters always look out for loopholes through which they can snatch away your hard-earned profits. eCommerce merchants currently face around 206,000 attacks on their online stores every month. As online shopping becomes more popular, there is a corresponding increase in the opportunity for cybercriminals to scam online merchants.
If you are operating an online store, you must take necessary steps to protect your merchant account from fraudsters who are looking to steal your profits, identity, damage your brand, alienate your customers, and destroy your reputation. In this blog, we will talk about eCommerce fraud prevention tools and services that can help protect your online store from malicious attacks.
What is eCommerce fraud?
eCommerce fraud is a criminal deception carried out during an online commercial transaction to achieve personal or financial gain. This act of a fraudster can negatively impact the merchant in many ways. Also called ‘payment fraud,’ eCommerce fraud targets online merchants and intends to remain undiscovered.
Types of eCommerce Fraud
Here are the most common eCommerce fraud activities:
- Credit Card fraud – Credit Card fraud is a broad term used for fraud committed using a Credit or Debit Card. Here, fraudsters use stolen Credit or Debit Card information.
- Chargeback Fraud – A shopper makes an online purchase and receives the item in chargeback fraud. After a few days, they falsely dispute the transaction and claim that it is fraudulent and unauthorized.
- Phishing – Fraudsters trick customers into sharing sensitive information and personal data, such as username and password, into logging in to their account and making illegal purchases.
Steps for eCommerce merchants to prevent online fraud
- Conduct regular audits
Conduct regular security audits of your eCommerce site to discover flaws and loopholes before criminals do. You must check for things like:
- Are all software and plugins up to date?
- Are SSL certificates working and updated?
- Is the online store PCI-DSS compliant?
- Is backup of critical data being done regularly?
- Are the passwords for admin accounts and databases strong enough?
- Are the websites being scanned regularly for malware?
- Is the communication between the online store and customers being encrypted?
- Ensure that you have a PCI compliant online store
If your online store accepts Credit Card payments, it must be PCI-compliant. PCI or Payment Card Industry compliance ensures the security of Credit Card transactions in the payments industry. PCI compliance makes sure that your business and online store meet the required standards.
- Monitor for suspicious activities
You must constantly monitor your online store for spurious activity and fraudulent transactions. You must look out for red flags, such as inconsistent billing or shipping information, suspicious physical address of customers, etc. You can use tools to track customer IP addresses and send alerts if any of them are from countries known for frauds.
- Implement an Address Verification Service
Participating banks and Credit Card processing companies often issue an Address Verification Service (AVS) to spot suspicious Credit Card transactions and prevent Credit Card fraud in real-time. The AVS service checks the billing address submitted by the card user with the cardholder’s address on file with the issuing bank. This check is part of the merchant’s request to the payment processor to authorize the Credit Card transaction. If the addresses don’t match, the service either declines the transaction or marks it for further investigation.
- Ask for CVV for all purchases
The CVV (Card Verification Value) code is the 3-digit security code on all Credit and Debit Cards. You must require all buyers to enter this code for every online transaction on your online eCommerce store with the merchant account. This can ensure that the customers who have paid have their physical Credit Card with them, reducing the chance of fraud and increasing safety.
- Use HTTPs for your site
HTTPS is the more secure version of HTTP, the primary protocol used to exchange data between your online store and customer web browser. HTTPS encrypts this data to protect sensitive information such as customer name/addresses, Credit Card numbers, etc. HTTPS prevents the online store from broadcasting the transactions to be easily viewed by hackers, fraudsters, and cybercriminals. You can implement HTTPS by buying an SSL certificate.
- Collect minimum customer data
Another way to prevent the breach or hack of sensitive data is collecting and storing as little customer data as possible. Ask for only the information required to complete a transaction and ship the product. Avoid collecting personal information like Aadhar card numbers, birthdays, and other sensitive data.
- Train your customer support
When your customer support team is untrained, it can allow fraudsters to bypass your security systems and commit fraud. You must train your customer support agents to be alert and watch for fraud indicators. You can add additional staff during peak season and ensure that they directly communicate with the customers to solve their queries.
- Partner with a trusted payment gateway
To eliminate any fraudulent activity and malicious attacks on your online store, you must partner with a trusted payment Ecommerce payment gateway like Zaakpay with reliable security features. The robust online security provided by Zaakpay can prevent cyberattacks and offer a safe, secure shopping experience for customers. The security features of the Zaakpay Ecommerce payment gateway include a PCI compliant SSL certificate, card authentication, two-factor authentication, fraud detection, and real-time payment monitoring.
- Check the validity of the IP addresses
Every order placed at your online eCommerce store comes from a unique public IP address. From the IP address, you can trace the city or area where the customer is placing the order. If this region does not match the address on the Credit Card used to make the purchase, that is a warning for possible fraud.
With digital platforms becoming advanced, fraudsters are also becoming more sophisticated in their attacks. eCommerce platforms and online merchants can adopt specific tools and techniques to understand all about eCommerce fraud. This knowledge can empower them to take essential steps to prevent fraudulent attacks on their online store.