Fraud Protection in E-commerce

Fraud Protection in E-commerce

Fraud Protection in E-commerce

Digital Payments has seen a boon in India with initiatives like Digital India and with the Global Pandemic also restricting brick and mortar shopping, E-commerce based transactions have also improved considerably. With payments for purchases transitioned to online methods, increase in security breaches by hackers and fraudsters by honey trapping customers which ultimately results in a fraud payment transaction been done. Fraudsters are the invisible entities of the World Wide Web masking their identities and spoofing into different transactions. There are different types of E-commerce frauds that can occur:
Takeover on a Customer Account:
Possibility of a fraudster stealing login details of a Customer Account is all the more dangerous if the Customer has saved payment details on his / her account. With the payment details compromised, the fraudster poses as a genuine customer to purchase stuff using the stolen card details.
Interception of Payment Transaction:
The fraudster keeps a certain set of users under observation, and when the User proceeds with the transaction of a larger amount, the fraudster intercepts the transaction, modifies the payment details i.e. the account details to the fraudster account due to which payment gets compromised.
Fraud by Triangulation:
Here, the hacker / fraudster creates a duplicate of an actual E-commerce website and poses as the genuine website. How customers fall into this honeytrap is that the fraudster adds high demand goods and provides a fake offer of selling at very low prices in comparison to the market price. It has also been observed that, the payment methods provided by these fraudsters are non-refundable and usually cant be traced easily to the source.
Certain best practices to avoid E-commerce fraud includes the follows:
Password Security and Account Lock Mechanisms:
Provision for a stronger password adaption policy, with usage of complex patterns to avoid account breaching. Provisions to lock account after certain attempts of Brute Force attack are performed will help control the integrity of Customer Accounts.
Adapting PCI DSS Standards with Encryption Policies:
Payment Card Industry (PCI) Standards are security policies / regulations for Payment Protection and Encryption to make E-commerce transactions more secure.
Verification of IP Address and Physical Address for Payment
Fraudsters mask their IP addresses with a foreign entity, to avoid letting out their own credentials. Verification of IP Addresses and Physical Addresses need to be verified and revert any attempt of fraudulent transactions.
Reliable Payment Processor / Merchants:
Choosing a reliable third party payment merchant since they are also earning from each sale which means these merchants are viable to provide secure transaction sessions as well.
Card Value Verification:
PCI standards defines that the CVV cannot be stored for any credit cards due to which any online payment transaction following PCI standards should mandatorily provide CVV during transaction, which makes it difficult for hackers to capture details for saved payment details until and unless a physical card is stolen.
E-commerce security practices should be followed by both the service provider and the customer, with practices to avoid data leaks or breaching any data integrity. Use of appropriate fraud detection software and filters to avoid any possibility of breaches.