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International Ecommerce & Digital Transformation Manager, Stage Entertainment
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E-commerce Security Threats and Solutions: How to Protect Your Online Store
Being a merchant is risky. Online stores are constantly subject to various eCommerce security threats that wreak havoc on the finances of their owners. According to Statista, the eCommerce industry lost twenty billion dollars to online payment fraud in 2021 alone.
Just think about it: twenty BILLION dollars to only ONE type of fraudulent activity in ONE year.
But apart from online payment fraud, there are many more schemes invented by resourceful scammers. It’s scary to even think how much financial loss they collectively cause to the industry. In any case, some of these schemes are so damaging that if you fail to protect your eCommerce site against them, they might eventually put you out of business.
The question is, how can you shield your online store from potential damage?
That’s exactly what we are going to discuss.
As a company that offers quality eCommerce development services, AnyforSoft has vast experience in developing security products that protect eCommerce businesses from most cyber threats. In this blog post, we share some insights into the most common eCommerce security threats. More specifically, we describe popular methods frauds use to capitalize on unprotected websites and steal money from the wallets of their owners. We also explain how to protect against these threats so that they don’t harm your eCommerce store.
Forewarned is forearmed, as the saying goes.
So without further ado, let’s dive deep into discussing the most common threats and eCommerce security best practices.
#1 Credit card fraud
We already described how to build an eCommerce website from scratch. Now it’s time to protect it. And the first on our list of the most common security threats in eCommerce is credit card fraud.
What it is: Credit card fraud is a type of financial fraud in which a scammer makes a purchase from your eCommerce store with a stolen credit card. As a result, when it comes to the attention of the real cardholder, they request chargebacks on the grounds that they didn’t make any purchases.
These requests are often approved by banks, so all the money that you earned is going back to the card owner. The problem is, your goods are already in the scammer’s hands, and the odds are you will never see them again.
How to protect against credit card frauds
Needless to say, this type of financial fraud causes significant damage to eCommerce store owners. Luckily, there are ways to address the issue:
Usually, when a buyer uses stolen credit card data, the billing address they submit differs from the actual billing address on record at the issuing bank. Thus, you can dramatically minimize card fraud by installing an address verification system (AVS).
Another red flag is accounts that try to make purchases with too many different bank cards. When one account attempts to order goods with different cards, they’re likely card testing—checking which of their stolen credit cards work. We suggest banning such accounts to prevent such a security risk of eCommerce.
Also, look out for foreign IP locations. For instance, if your store serves customers in the US only, but someone is attempting to make a purchase from India, that should be a warning sign.
Last but not least, stay vigilant when someone places a high-volume order. Scammers that have access to someone else’s credit card information tend to purchase high-ticket items since the money they’re spending isn’t their own.
To significantly minimize credit card fraud, we suggest investing in a fraud protection system. AnyforSoft has extensive experience in developing them.
For example, we created a sophisticated fraud protection system for an online beauty store Bellame. This system automatically identifies suspicious activities, checks the billing information, and conducts additional security checks. When it suspects a certain user might be distrustful, it calculates the probability of fraud and informs account managers about a potential threat. That helps Bellame prevent such eCommerce threats as payment fraud and save thousands of dollars every month.