Cybersecurity is one of the most crucial features of electronic commerce. Without proper protocols in place, online retailers put themselves and their customers at risk for payment fraud. Smaller stores face even greater ecommerce security risks due to insufficient internet safety from cybercriminals. Records show one in five small business retailers fall victim to credit card fraud every year, with 60 of those stores being forced to close within six months.
Not only is hacking a huge risk for all online merchants, but accepting a fraudulent payment also comes at the cost of having to refund the charges. Outside of financial consequences, data breaches damage a brand’s reputation and can cause once loyal customers to avoid putting their information at risk again. However, using the right tools will minimize the threat of fraud and instill trust within your customer base.
Definition: Ecommerce security is a set of protocols that safely guide ecommerce transactions. Stringent security requirements must be in place to protect companies from threats like credit card fraud, or they risk jeopardizing revenue and customer trust, due to the inability to guarantee safe credit card processing.
Ecommerce security risks can be accidental, intentional or caused by a human error. The most prevalent cybersecurity threats include phishing attacks, hacking, credit card fraud, data errors or unprotected online services. For an ecommerce business, poor security management is the greatest cause of risk for online retailers.
Phishing attacks target user data such as login credentials and credit card numbers. Using social engineering, an attacker will pose as a trusted entity to deceive a victim into opening an email, text message or instant message.
Within an ecommerce site, there are multiple vulnerable areas that can serve as an intrusion point for a hacker to gain payment and user information. Using malware, an attacker will extract the credit card information and sell the data, sometimes on black markets. Fraud is then committed to extract the greatest value possible through ecommerce transactions, ATM withdrawals, etc.
What can online store owners do to strengthen their websites' security?
Most ecommerce platforms have an arsenal of built-in security features dedicated to mitigating electronic commerce threats. Here are some of the ways online merchants can bolster safer credit card processing and data security.
The best way to keep your ecommerce business safe from cybercriminal activity is to layer your security. Make sure your platform host has protections in place on an application-level like contact forms, search tools and login fields.
Ensure you compare hosting providers to ensure yours monitors all transactions for suspicious activity. Set up an alert system to flag potential threats like a billing address and shipping address not matching, or multiple orders being placed by a single user with different credit cards.
Your ecommerce platform should issue frequent updates and PCI scans to field for any potential threats that may be targeting your online store. Automatic updates should also be a standard practice in preventing new vulnerabilities to viruses and malware.
To facilitate safer credit card processing, use an Address Verification System to compare the billing address a customer has entered to what the credit card issuer has on file. An AVS will automatically separate legitimate transactions from fraudulent attempts.
Card Verification Value is the three- or four-digit code on the back of a credit card. Under PCI standards, retailers are not allowed to store this number, even if they record customers' names, addresses and credit card numbers for future transactions. Additionally, many cybercriminals have a credit card number, but not the physical card. A CVV requirement makes it much more difficult for a fraudulent transaction to be processed.
Hackers use algorithms that generate customers' passwords. These programs run through all the possible combinations for a four-digit password, with the ability to find the right alpha-numeric password quickly. Longer passwords with at least one special character and a capitalization are more secure. If implementing stricter password standards, let customers know it's for their protection.
SSL certificates authenticate the identity of your business and secure the data in transit during checkout. This keeps your company and your customers protected from having financial or important information compromised by hackers.
In order to be PCI compliant, and ecommerce platform must adhere to a strict set of policies and procedures that guarantee the security of payment via credit or debit card. Some of those measures include encryption, anti-malware software, extensive monitoring, risk analysis and more.
Most websites simply don’t have the bandwidth to protect against a DoS/DDoS attack, however, the ecommerce platform you choose should have the security in place to counter this threat.
As more consumers adopt online shopping, security in ecommerce is a high priority for both merchants and shoppers alike. Customers should always research how secure a site is before entering financial information, while merchants should have multiple layers of security in place to keep valuable data protected.
Cryptography is the practice of encrypting data into an unreadable format, known as cypher text. Typically used to protect data, payment information or emails, only those who possess a secure key can decrypt the messages into plain text.
Secure Electronic Transaction Protocol (SET) is a three-way transaction between the user, merchant and bank using specific protocols.
Encryption is the practice of encoding data to ensure the data can be securely relayed over the internet. It acts as one of the most effective methods in mitigating ecommerce security risks to safeguard data integrity.
SSL certificates use small data files to secure a cryptographic key to a company’s file. When an SSL certificate is installed on a web server, it uses specific protocols to facilitate a secure connection from the server to a browser.
Online credit card fraud uses phishing attacks, hacking or malware to steal financial information for fraudulent transactions.
Merchants use payment gateways provided by an ecommerce platform or ecommerce application to authorize credit card payments for online retailers or traditional brick and mortar stores.
Hubspot article on ecommerce security solutions.
Heimdal Security gives security advice for a safer ecommerce environment.