How Serious Is Mobile Fraud? For Ecommerce Sites, More Than You Think
2 billion people will use their phones to purchase items this year, but how many will also create security vulnerability for your ecommerce business?
Young consumers are paving the way for mobile ecommerce development. Although, this isn’t news, as we have all been raving about mobile optimization for years. Neither should it come as a surprise that fraudsters have found a way to use these beautifully designed ecommerce sites as a way to hack. So the question remains: how can you protect yourself?
Ecommerce Blind Spot
According to Entrepreneur, ecommerce mobile websites have created a blind spot in their design by pushing speed and UX design.
They write, “Ecommerce development has been largely focused on design and performance for the past years. The often-cited Google study on mobile speed warns about the consequences of slow-loading websites. Experts have also compiled mobile user experience (UX) best practices that promise to deliver better conversions.”
This doesn’t sound so bad right? It sounds a lot like what we’ve all read about how to do ecommerce correctly, but we may have all forgotten something pretty important.
Ecommerce continues to explain, “However, this preoccupation with performance and UX improvements may be putting other aspects of ecommerce like security and fraud prevention on the backseat.” This is from where the problems stem. Whenever you hear security is not a priority, you probably want to take note.
The holes in security are magnified because security measures that do exist are largely dominated by one or two security tools. In fact, it has been reported that 90% of ecommerce websites are using the same security techniques. This creates a domino effect: if one site falls, the rest follow suit.
What is really at risk?
You may think, “So a couple of purchases are fraudulent, who cares? The credit card companies can handle that.” This, my friend, is a mistake.
According to Verifi, “Card-not-present (CNP fraud) is predicted to more than double by 2018, driven largely by the US rollout of EMV and expected increases in online spending in the US market from 262.3 billion in 2013 to $440 billion by 2017.”
These numbers represent a trend that could become detrimental to your business and it’s down to one sneaky little rule. Signifyd explains the trouble with ecommerce and CNP fraud:
“Without the standard security measures such as checking identification and paying with a chip enabled card, an online transaction is deemed far less secure. Given the riskiness of accepting an online transaction, the liability of accepting a fraudulent transaction rests with the merchant themselves, and not the issuing bank.”
Put simply, if fraud is detected, merchants have to return the sale they worked so hard for. They also gain a reputation for being an easy target for fraudulent purchases. This may scare off future customers. Your brand; your reputation and your bank account that is deemed responsible for these types of fraud. Consider the impact of this for a moment.
So, what can you do to prevent ecommerce fraud?
There are preventative measures to block this loophole:
ID Authentication
This method is similar to the two-factor authentication currently enjoying popularity. You can achieve this by having customers enter their phone number. Buyers then verify by entering a code for each purchase. Not all buyers are going to want to give your their phone number, but this method has shown to significantly decrease fraudulent activity.
Pay Attention
When you are processing orders, if something looks fishy, it probably is. No tool in the world can compare to good old common sense and intuition.
Device Authentication
Every device connected to the web has a unique “fingerprint” of sorts. Take advantage of these identifiers to implement additional security measures when return shoppers are visiting from a new device. A simple email letting your customer know can work wonders in lowering fraudulent purchases.
Mobile Geolocation
A high percentage of mobile users keep their locations turned on for convenience. So why couldn’t this tool be used to boost security as well? Much like the device authentication, this method allows you to create patterns for you customers. If purchases are made from a new location, you can implement additional security screening.
Security measures may seem quite simple, but it is often the easiest tricks that go the farthest in preventing fraud. Think of the Trojan Horse, a simple trick that proved most effective.