E-commerce has seen an unprecedented rise in sales in the past decade and is predicted to have continual growth as more and more businesses shift their operations online. However, the increase in e-commerce platforms has also positively correlated with the rise in fraud instances, plaguing the industry by affecting widespread user adoption.
The fraud starts at the customer end, where criminals gather their financial information such as their credit card number, Card Security Value (CSV) number, address, etc., to portray that they are the asset’s valid owner. However, there are some actions that fraudsters perform that are telltale signs of ill-intended activity, which is where fraud detection and prevention comes into play.
Analyze Customer Behavior
Analyzing customer behavior is an excellent way to judge if criminals have access to their transaction information. Customers typically do not deviate from their buying patterns so look out if they suddenly start buying unconventional items in large quantities. On top of that, criminals know that they want to have the product in hand as soon as possible to escape investigation quickly, so they pay extra for expedited shipping.
If the two actions come together, make sure to verify the credentials from the actual owner if you have their contact details. Depending on the volume of transactions your e-commerce business handles, you might need to invest in AI and Machine learning software that assess fraudulent transactions based on customer behavior metrics. It will significantly speed up the process and dynamically adapt to criminal fraud tactics.
Pay Attention to all Addresses
Considering how the internet connects us, cybercriminals don’t even need to be present near their targets when stealing financial information. They can obtain large databanks from dark web sources that reveal customer information and carry out fraudulent transactions remotely. However, this means that they don’t have access to their target’s IP address and use masking techniques to remain anonymous. They’ll ship their purchased product to a location that is different from the customer’s; hence, one can look out for disparities in registered and submitted shipping addresses as well.
You can employ an Address Verification Service (AVS) to automatically check whether the shipping address matches the actual customer address to ward of potential fraud in e-commerce transactions. Similarly, anti-fraud software comes with features that check whether transactions from an IP address look suspicious. They’ll notify the authorities if multiple cards are used on the same IP address or different the same card on separate IP addresses in other locations.
Secure your Website
Besides committing fraud at the customer end, cybercriminals can target e-commerce websites themselves by exploiting weaknesses in their security. It may happen that your admin login page isn’t well protected, or you have vulnerabilities in your access control system. If so, you need to look out for data breaches use dark web monitoring tools to see if any data leaks have occurred and mitigate their spread. They may contain customers’ financial and personal information, giving them access to resources to organize fraudulent activities.
To prevent this from happening, you need to keep your website security software up to date. Ensure you own an SSL certificate that encrypts user information while it travels from their PCs to your servers. And keep all data in encrypted format instead of plain text so that it remains hidden even if hackers get a hold of it, preventing e-commerce fraud.