|
Ecommerce
merchant risk types
There are a number of fraudulent
transactions which get processed in
ecommerce businesses. To add to this,
there are also security breaches which
allow personal data on the card to be
copied. This costs the mail order –
telephone order and ecommerce
establishments with huge amount of money
each year. This makes it imperative for
traders in these businesses to know the
risks connected to online business. If a
trade involves taking the payments in
the “card not present” setting, then an
internal policy needs to be developed so
that the potential risks can be
addressed. Following are a few typical
risks encountered by mail order –
telephone order and ecommerce
organizations:
Fraudulent Transactions – Fraud on
the internet can take a number of
shapes:
-
A consumer frequently makes use of
stolen card numbers to purchases
services or products.
-
A member of the family buys goods
without the authorization of a
cardholder.
-
A consumer makes a false claim that the
shipment has not been received.
-
The processing system for card payment
of a particular ecommerce merchant has
been hacked by a criminal and he/she is
issuing credits to themselves.
Online theft of card account details
– There are quite a few ways in which a
hacker can access personal information
present on the card:
-
Intercepting the data present on the
card during the transmission of the
payment processing from or to the
merchant.
-
While accessing the payment processing
system of a merchant account provider
who is inadequately protected and
stealing information from them.
The theft of information present on
the card from some physical site – There
exist several possibilities where the
information can be taken from some
physical data site. This includes:
-
The stealing of payment account
information by outsiders from the site
of the merchant account providers. The
stolen information will then be sold for
unauthorized use.
-
Garbage collection personnel rob the
non-shredded personal account
information from the site of merchant
account providers.
Chargebacks and consumer disputes –
There are a number of reasons why a
consumer could dispute the transactions.
The most common reasons are listed
below:
-
The service or the produce purchased by
the consumer is not the same as it has
been described on the website or
promotional material.
-
The consumer has been billed even before
the products or goods have been shipped
or before the services have been
provided.
-
There exists some misunderstanding with
regard to an order cancellation or in
the refund or return of the product.
-
The consumer will be billed two times
for a single order, or the amount for
transaction is not correct.
-
The consumer fails to recognize the name
of the merchant on the statement of the
credit card.
-
The consumer’s card gets charged without
his/her approval.
It is advisable that in a “card not
present” scenario, frauds are mainly
committed in order to obtain goods which
have a high price and can be resold
easily, like jewelry and electronics.
|
