The enormous rise of e-commerce has created a wide range of global opportunities for businesses and customers to enhance their offerings and shopping experiences. According to Statista, global e-commerce sales will total $5.4 trillion in 2022. Ecommerce fraud is a different category. Nevertheless, that is growing concurrently with online retail.
Best Practices for Preventing E-Commerce Fraud:
Ecommerce fraud prevention techniques shield customers and merchants from identity theft and monetary loss. The first thing to do is get software for eCommerce fraud prevention as it guarantees more streamlined financial processes, a strong company reputation, and a reduced chargeback rate for the merchant. The best-tested techniques for preventing e-commerce fraud are listed below:
Leverage eCommerce fraud prevention software solution: Software solutions for preventing fraud provide seamless anti-fraud protection for online retailers. These tools track client information and payments, find security flaws, and alert retailers to potentially risky consumer behavior patterns.
Conduct recurring security audits: Try to identify security gaps before scammers do. Regular security audits considerably decrease the danger of fraud. Create procedures to safeguard yourself:
- Software and shopping cart plugins should be updated often.
- Plan regular changes if a third party hosts your payment pages.
- Use secure passwords and passphrases for admin accounts, databases, content management systems, and SSL-encrypted online payment forms.
- Keep your PCI-DSS compliant.
- Encrypt all customer and e-commerce company communications.
- Backup your customer information.
- Scan websites for malware regularly.
Utilize a Trustworthy Payment Processor: Work with a trustworthy payment processor to secure a high level of security from e-commerce fraud. Inquire about protection measures, such as PSD2 and PCI compliance, and fraud-prevention tools when searching for the best processor. Their systems for fraud detection must operate without interruption and adhere to best practices and current laws.
Ensure PSD2, SCA, and 3DS compliance: Recently, strict laws have been implemented to address the growing risk of online payment fraud. The most well-known rules governing payment processing are as follows:
Follow PCI Standards:
Every company that accepts credit cards must follow the Payment Card Industry (PCI) standards. The main credit card associations, Visa, Mastercard, Discover, and American Express, demand adherence to PCI standards to secure customer data and stop fraud. The PCI Security Requirements Council is responsible for upholding the standards.
Keep an eye out for shady shopping behavior:
To lessen and eventually eradicate e-commerce fraud:
- Keep an eye on consumers’ accounts and transactions.
- React immediately whenever a customer engages in an odd action or a bizarre payment is made using their account.
- Depending on the type of activity seen, get in touch with either the customer or the card issuer to find out who is attempting to make the payment.
Implement the Address Verification Service (AVS): Implement the Address Verification Service (AVS) system to spot fraudulent credit card purchases and detect transactions that may be harmful. The billing address provided by the payer is compared to the billing address registered with the issuing bank through the AVS system. The system either blocks the payment or requests more steps if the addresses don’t match.
Ensure Card Verification Value (CVV) Use: A three-digit (or four-digit for American Express cards) card verification value (CVV) is printed on the back of every credit card issued by Visa, American Express, Discover, and Mastercard. Insist that each card-not-present payment from a buyer includes the provision of this code. By doing this, shoppers may be sure they own the credit card they use to make the purchase, lowering the risk of payment fraud.
Avoid shipping orders to virtual addresses and PO Boxes: E-commerce scammers frequently provide PO boxes and virtual addresses. Refusing to ship requested items to incomplete or ambiguous addresses is one of the greatest strategies for e-commerce fraud prevention. Make it clear in your company’s policy that shipments can only be accepted if delivered to a validated and physical address.
Apply HTTPS: The fundamental protocol for transmitting data between a client and a server online is called Hypertext Transfer Protocol (HTTP). HTTP is the path taken by data exchange between an online store and a customer’s web browser in the context of an online store.
All personal information is encrypted using the Hypertext Transfer Protocol Secure (HTTPS) to ensure that information like credit card numbers, customer names, and addresses is secure while in transit.
For hackers, the protocol makes life much more difficult.
They won’t be able to decrypt the data even if they manage to intercept it.
Educate Your Clients: Customer education is a successful anti-fraud strategy. They will support multi-factor verification if they recognize the value of providing more information for a reliable identity. Consider including a brief description of how a strong password improves the security of your consumers when placing orders on your e-commerce website underneath the sign-in box.
The e-commerce industry will continue to grow and protect its data. Because of their customers and their customers’ assets, merchants will need to adopt the right software for e-commerce fraud prevention and suitable anti-fraud procedures.
Credit card associations, card-issuing banks, acquiring banks, payment processors, and merchants collaborate to avoid fraud. To reduce payment risks and ensure sustainable business growth, adhere to the fraud-prevention strategies outlined in this guide.