Online fraud is rising. Even if you haven’t been targeted by Russian hackers or Nigerian scammers, at some point, your e-commerce store will become a victim of fraud. It is surprisingly common. As many as 50% of small businesses are affected by fraud and for online stores, the problem is even more widespread. Fortunately, there is a lot you can do to minimise the likelihood you fall victim to fraudsters.
Use a Strong E-Commerce Platform
Instead of using a custom-designed e-commerce framework, consider using an e-commerce platform such as Shopify or Magento. These platforms come with built-in security features and work straight out of the box. You can integrate payment solutions and shopping cart systems such as PayPal or Stripe and enjoy extra security at the same time.
This reduces your risk, but at the same time, if you are targeted by fraudsters, you have access to great customer support. Read the reviews before you settle on an e-commerce solution, as different e-commerce platforms offer different features.
Verify Customer Information
Install a system that verifies customer information. Cognito is a leading identity verification solution that cross-checks customer data against government databases and information provided by financial institutions. It even checks whether a customer is listed on a Death Master File (a very common type of identity fraud).
Using an identity verification solution will help you stay compliant with KYC regulations and limit your exposure to fraud.
Don’t Store Sensitive Data
Your e-commerce business is less likely to be targeted by hackers if you don’t store card information. If you do need to store credit card data for recurrent charges, make sure you implement the latest PCI encryption technology.
Utilise Business-Grade Online Security Software
Install professional-grade internet security and anti-virus and malware software. Consumer grade products are not strong enough for businesses and e-commerce stores. You need software that will plug holes in your security and prevent hackers from exploiting vulnerabilities. Always make sure you are running the latest operating system and don’t forget to install updates the moment they are released. An awful lot of businesses have fallen victim to hackers because they are still running Windows XP long past its use-by date.
Educate employees on fraud prevention. They need to know how fraudsters work and how to spot fraudulent transactions. For example, if a card transaction is flagged up because the address doesn’t match the cardholder’s home address, your employee must not override the system to process the payment.
Put Robust Systems in Place
Set up strong systems and processes from day one. From using tracking codes for orders to making sure customers are forced to create strong passwords containing a mixture of numbers, letters, and characters – all these things work together to make your e-commerce site more secure. Don’t forget to set payment limits too. Allowing one customer to place unlimited orders with no verification is a recipe for disaster.
In many cases, fraud is preventable, but if it does happen to you, keep a record of all fraudulent transactions and any data associated with the customer. You may be able to spot patterns, which could help you minimise future fraudulent activities.