Several eCommerce merchants are unaware of how much their business is susceptible to risks like data breaches, cyberattacks, and card fraud. Fortunately, there is a way to protect customers and their data from such threats – smart business risk management strategies.
Fraud risk awareness is crucial, and especially if your business includes online sales. You may lose up to 5% of your gross revenue due to card fraud, which is a result of data breaches and security vulnerabilities. On every fraudulent charge, eCommerce merchants lose money not only on merchandise but also on shipping and chargeback fees.
Risk Management Best Practices as Elucidated by Robert Trosten
Understand your risk level
Several factors contribute to putting an eCommerce business at the risk of fraud, they are:
Processing transactions in high volume.
Operating in specific categories such as electronics, jewelry, travel, hospitality, gaming, and health & wellness.
Offering subscription services that involve recurring payments.
When you assess your risk levels, you learn where stronger security is necessary to protect both cardholder data and business systems.
Improve risk awareness
- eCommerce merchants and their team should be aware of the most common types of cyberattacks and frauds. They are:
- Clean fraud – An unauthorized purchase seems legitimate
- Identity theft – Hackers steal customers’ credentials and use them for unauthorized purchases
- Account takeover – Hackers take control of customers’ accounts
- Phishing & Pharming – Tactics to steal customers’ credentials using fraudulent emails and fake websites.
With proper security procedures, merchants can avoid most of these risks to their business. Besides getting in touch with an eCommerce consultant for business risk management advice, business owners should educate their employees about cybersecurity and customers about shielding their information from hackers.
Identity theft and credit card fraud are two common methods of online fraud. To reduce the risk of becoming a victim of hackers, make cybersecurity the topmost priority, and secure cardholders’ data.
If you don’t have cybersecurity protocols in your place, hire cybersecurity experts to create a security plan after evaluating your network. Robert Trosten suggests that it should include network monitoring, access control, multi-factor authentication, and endpoint security.
Work on prevention solutions
When business owners filter fraudulent transactions using velocity filters, CVV verifications, address verification, and purchase amount filters, they considerably minimum unauthorized purchases.
But limitations of these options result in lots of false declines, which negatively impact customer experiences. While automated fraud detection technologies have the same potential problems, manual fraud monitoring lacks precision and takes a significant amount of time. However, a combination of both provides the best balance.
Improve website security
It is vital to secure your website from possible malicious activities. If you have a hosted checkout solution, make sure your provider has an SSL certificate in place, which ensures data is encrypted and shielded from hackers.
Not only is it beneficial for data protection, but also customer relationships and retention. It acts as a trust signal by assuring customers their card information is safe when they make purchases. Be sure to keep all security plugins updated on your website to provide ongoing protection and prevent malicious activities.
Here we have mentioned a few risk management best practices that will help you guard against card fraud and security risks. Besides keeping these things in mind, it is best to get in touch with a cyberlaw expert who not only helps you deal with any cybercrime cases but also advises you on business and financial risk management for protection against data theft and online fraud.