For as far as we’ve come with the world wide web and its accompanying e-commerce features, there are still some risks that can get in the way of business as usual. The internet is a vast and inclusive space that comes with its own vulnerabilities – especially where money and business is involved. While there are many great online payment processors and resources like Shopify and WooCommerce to help support businesses with online transactions, there are still risks. Becoming aware of what these risks are and how to fix them is the best line of defense for online sales.
The following are the most common risks that today’s online businesses face. If you’re building an e-commerce business or adding a form of online payment to your site, be sure to be weary of these risks and double check your technology to protect against them.
1) Identify theft
Picture this: you get an order for your online business, so you fulfill it. It’s in the mail already when you get a notification that there’s been a fraud-based chargeback, meaning that the customer’s bank has rescinded the payment because the real customer has been a victim of identity theft. In this case, someone has stolen their name and credit card information and they purchased something from you with this.
Of course, now it’s too late, because you’ve already shipped your product. The victim of the fraud has been repaid by their bank, but you haven’t, and you’ve lost the cost of the goods sold. Identity theft is becoming more and more of a problem in the wake of the pandemic and global financial troubles. If your payment processor doesn’t have defenses against fraud, you are vulnerable.
2) Friendly fraud
Another type of fraud is called ‘friendly fraud’ because it isn’t as hostile as full-blown identity theft. This is when a customer honestly uses their own card information, but initiates a chargeback with a bank after you’ve already completed the service or mailed the product. Say for example that you’re an astrological chart reader, and you complete a reading with a customer who booked and paid with a credit card. Then, after the session, you get a notification that their bank or credit card company has declined the amount.
They’re able to do this if they tell their bank that their card information was stolen, or tell them that “they didn’t order what is on my statement.” This once again causes a risk to your business’ livelihood, because you already completed the service, and the fee is rightfully yours’.
3) Data breaches
Imagine that you’ve invested in a payment processor, and you trust that it will get the job done. Customers can put in their credit card information and everything will be transferred to your company’s bank account seamlessly. Except, the processor or platform isn’t actually as secure as it was advertised. You get notification that there’s been a company-wide data breach, and the credit card information of all of your clients’ is at risk. This happens more frequently than you’d think! You definitely don’t want to be the reason that a client has to cancel their cards and get new ones to prevent identity theft, even if it wasn’t your fault or your intention.
4) Complications with international payments
Because many countries have different methods of payments and policies around online transactions, it can be difficult to expand your clientele or customer base beyond a few core countries. Or, you use a payment processor that does permit currency exchange, but it comes at a pricey risk for you or the customer, taking a large chunk in fees to complete the transaction.
How to Avoid These Risks
With risks this severe, it’s critical to have a payment platform that you can trust. Many technologies are entering the scenes to save the day, such as PayCertify. PayCertify’s platform prevents fraud and friendly fraud in a number of ways. For one, it uses a blend of partner and proprietary technologies to detect the key indicators of fraud, based on machine learning and artificial intelligence. If it suspects fraud, it will immediately block the transaction.
PayCertify also shifts the liability for a chargeback back to the bank of the customer. So, that client who benefitted from your service, then attempted a chargeback through their credit card company? Not your problem. PayCertify ensures that the credit card company would carry the financial fault.
It’s also a fully integrated global platform as the first globally connected fintech marketplace. So, it’s easier than ever to conduct business worldwide without running into hiccups, exclusions, or outrageous fees, for you or your customer base. Thankfully, the more global e-commerce expands, the more technology is rising to the challenge to make online transactions as seamless and easy as possible for everyone involved. And, on the risk front, these defensive technologies ensure safety, too!
Be sure to look out for vulnerabilities in your processing system and be diligent about any red flags.