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If you’re selling online, then you’re likely aware of the many benefits of doing so. However, as with most things, there are risks involved. Fraud and failed payments are two examples. Thankfully, overcoming these challenges is possible with the right tools and processes, as well as prevention tips. Being an e-commerce merchant involves understanding the risks and mitigating them to protect your business. Here’s what you need to know.
1. Payment Fraud
Scammers often target online stores because digital transactions allow them to use fake identities and stolen credentials to get the things they want. But financial fraud can cost your business a lot of money, penalties from payment processors, and other drawbacks. You may also find it hard to get approved by payment processors later on if fraud has been an ongoing issue.
Protecting your business involves implementing fraud detection tools and doing a manual review of high-risk transactions, like those from unusual locations or that have repeated failed attempts. You may also implement a fraud system that uses machine learning to flag suspicious activity, such as a new shipping address or device.
2. Failed Transactions and Declines
Legitimate transactions can fail due to expired cards, routing problems, or even network issues. It could be as simple as a customer forgetting to update their billing address. These declines can cost online merchants like yourself revenue and hurt the customer experience, too.
Getting ahead of the payment issue is important to minimize financial and other risks to your business. For example, notify customers proactively before a card expires. Also, monitor authorization rates and reasons for declines, identifying issues like broken checkout processes and other errors to fix. Finally, work with processors who understand payment authorization optimization, offering tools and intelligent routing systems to reduce false positives, recover legitimate revenue, and provide a smooth customer checkout.
3. Data Breaches and Cybersecurity Threats
Online stores can be targets for hackers looking to gain access to sensitive customer details. A breach could make your long-time customers think twice about shopping at your store again. When your business reputation gets damaged, it can be hard to bounce back.
To prevent those issues and make sure your business continues to run well, using HTTPS and SSL certificates makes sense. Without HTTPS encrypting data, customer names, passwords, and even payment info are vulnerable. Use strong encryption to protect stored data, significantly reducing exposure in the unfortunate event that a breach happens. Attackers would not be able to extract usable credit card data, and your company has lower liability.
Conclusion
Selling online comes with risks, including security threats, a damaged reputation, fraud, and failed payments. But there are ways for online merchants like yourself to protect your revenue, increase customer trust, and continue to build your business. Be sure to also clearly communicate your shipping and return policies on your website.
Many companies also offer a live chat feature to improve customer support and improve their online experience. By combining approaches, you can stay competitive with your digital store. That can reduce lost revenue, penalties, and other consequences.