Rising number of SMEs and their increasing need of creating a digital presence in today’s tech-savvy world, are expected to be among the primary reasons, initiating the growth of the e-commerce industry all over the world. Easy availability of internet, at a reasonable price, is constantly bolstering the use of smartphones by people of all economic strata across the globe. With the access of internet reaching the mass and internet usage gaining considerable momentum, mostly all sectors ranging from travel and leisure, financial services, grocery, education to fashion, are establishing their foothold in the digital space. The advent of 4G and 5G technology is fuelling the growth of the industry by enabling faster browsing. However, technological awareness among customers can only ensure a positive impact on the market growth. Research says, the global e-commerce market is anticipated to grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027(source: www.grandviewresearch.com). North America and Europe are expected to witness a steady growth over the forecast period.
Not only the SMEs, but also established companies are switching to online businesses, these days, eyeing the benefits of e-commerce trades, like lesser expenditures in communication and infrastructure. Besides, the online business module helps brands easily reach out to a wide number of customers. Also, the increasing importance of online marketing tools like Google ads and Facebook ads, due to the popularity of social media applications, is exceedingly driving the e-commerce industry. Though, the concept of online business has been known to traders since quite a long time, but, after the COVID-19 pandemic, more number of entrepreneurs are stepping into the digital space, considering the customers’ inclination towards online shopping.
While e-commerce brings a lot of convenience and profitability to a business, it often exposes a company to multiple risks simultaneously. These threats come from e-commerce frauds, which most online traders face, almost every month. On one hand, the growing popularity of online shopping is turning out to be a boon for the e-commerce industry and n the other, it is making easier for cybercriminals and unscrupulous customers to scam online businesses. Therefore, for traders owning and operating online stores, it is extremely crucial to protect their businesses against fraudsters, who are capable of crashing their online reputation and estrange their customers, which can eventually turn out to be detrimental for the businesses. Now, what exactly is e-commerce fraud? It is a kind of deception conducted by cyber criminals(those who practice illegal activities in the digital space) during a commercial transaction, over the internet. Cyber criminals mainly aim for financial gains. But, sometimes, cybercrimes take place because of some fraudsters’ intentions of negatively affecting the reputation of certain brands. Payment fraud is slowly becoming a common occurrence, these days, as it can be conducted remotely, with just a computer and a stable internet connection.
5 Most Popular E-Commerce Frauds:
- Credit card frauds
Also termed as card-not-present or payment fraud, in context of e- commerce fraud, credit card frauds are conducted using a credit or debit card. In such a case, the scammer buys products or services from an online trader using a stolen credit card. Generally, the deceiver buys the card data, visits an online store and make the purchases with the stolen card number. This practice not only defrauds the real cardholder, but also dupe the merchant, who gets into an obligation of refunding the purchase amount. Often, the store owner needs to pay a chargeback fee to the bank, that issued the card.
- Affiliate frauds
In affiliate marketing, a commission for sales is paid to the affiliates by the merchants. A unique, trackable link is given to the affiliates. This link directs buyers to the merchant’s store pages. Once one of these links is clicked and a purchase is made, the affiliate gets rewarded, by the merchant, with a percentage of the sale price, as a commission. In case of affiliate frauds, the online merchant is scammed using fake activity to generate commissions. Typically, a fraudster registers domain names, that match the most frequently mistyped versions of an online store’s genuine URL. Post that, the fake domain name is redirected to the merchant’s website, with an affiliate link.
- Chargeback frauds
It is basically a demand made by a credit card provider to a retailer to refund a disputed transaction. This occurs when a purchase is made using a credit card and a refund is requested from the credit card company, after the product is delivered. The credit card company then passes that through the issuing bank. As a result, the payment processor demands the retailer to refund the purchase amount to the card issuer. A fraudster waits for weeks after getting the purchased items delivered and then contacts their banks claims the transaction to be unauthorized.
- Phishing/account takeover
Using phishing schemes, online deceivers hack into the accounts of the customers, that carry personal information, financial data, and purchase history. Customers are often sent emails, by fraudsters, asking for confidential data like usernames and passwords. Once the data is given, the scammers log into the accounts, change passwords and make unapproved purchases.
- Inception Frauds
In case of inception fraud, fraudsters make online purchases using stolen credit cards, ship the purchased items to the address that’s on file for the credit card at checkout, but cuts off the package before it is delivered, by calling the customer service and requesting to change the delivery address.
To identify e-commerce frauds, online merchants need to consider inspecting when the data is not inconsistent, like non-matching zip code and city entered, the orders are larger than usual, a customer that purchases from an IP address, different from the one he/she always purchases, a buyer makes multiple purchases under one billing address but ships the goods to more than one addresses, back to back purchases are made in a non-festive season and there are multiple declined transactions in a row.
Benefits Of Outsourcing To Call Centres :
- BPO firms help companies to efficiently review through process innovations, completely focused on business outcomes.
- Partnering with a call centre gives a company access to skilled personnel, additional reference checks, measurable performance, experienced investigators and 24×7 support.
- Giant BPOs, these days, are implementing credit card fraud detection systems to prevent transaction frauds. They are combining automated tools with offshore capabilities to minimize loss of revenue to the company and decrease charge-backs. Also, they have well- defined metrics to measure the process performance.
- Reputed BPOs can perform additional reference checks to identify fraudsters and offer periodic reports to the company. Eventually, this helps to prevent cancellation of bookings and orders of genuine customers.