There are different types of risks for e-commerce merchants. These risks can range from loosing money from a sale to criminal charges from customer’s private and vulnerable information not being properly secured. Two types of risks that e-commerce merchants will need to be aware of and manage are fraud and account information theft.
FRAUD
Fraud is one of the big ones because there is no way to do a face-to-face verification that the person using the card is the owner of the card or has the authority to use the card. These are the ways that e-commerce customers commit fraud when buying goods and services online:
- Stolen card-the person is often able to pass the online verification because the card is in hand and it is pretty easy to acquire the other information needed
- Unauthorized use-person is related to, visiting, or in a relationship with the owner of the card and uses it without the owner’s knowledge or permission
- Claim of non-receipt-customer orders, pays, and receives goods or merchandise and then claims to have never received the item(s) and requests a refund or credit
- False credit added to an account-there are professional hackers that are able to get into payment processing and issue credit to their own account
ACCOUNT INFORMATION THEFT
Though e-commerce companies do their best to have a secure website to do business from, account information still get compromised. Here are some of the ways that this happens:
- Transmissions-the account may be secure, but the information is transferred in a secure manner or hackers are able to hack into the information while it is being transferred.
- Stolen data-a merchant doesn’t have the cardholder information secure, the cardholder information is secure, but the merchant processing system or website is hacked into and the information is stolen
- Dishonest employees-a merchant hires an employee who is not honest and an employee who has access to account and personal information steals the cardholder information for personal use or sells the information
- Ignored procedures-staff may be lazy, untrained, or careless and doesn’t keep private information secure as required by the guidelines of the company. Information is exposed incidentally or is not destroyed (shredded) properly and ends up in the hands of someone who is dishonest.
Many merchants choose to reduce their risk of fraud and information theft by hiring a knowledgeable and professional payment processing company like Merchant Data Systems. They provide the services needed to reduce the risks for e-commerce merchants.
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