E-commerce has become a major way through which we buy and sell things. Part of this is due to the fact that everything is slowly becoming dependent on the web. But e-commerce in particular has become popular because it is much more convenient than traditional buying and selling. Why? Well, with e-commerce merchants customers do not have to deal with cash. They simply click a few boxes and type in a few numbers, and they’re ready to buy. For that matter, many e-commerce merchants offer customers the opportunity to store their card information on their accounts. Presumably, this makes things easier for everyone involved. Next time you buy, you don’t even have to re-enter your card information — you just click and buy. There are several problems this presents. For clients, this makes it easier to overspend. But that is not illegal, and is certainly something that customers are responsible for keeping in check on their own. No — the greater problem is fraud. When your card information is online, it can become all too easy for people to steal it, whether by hacking insecure sites or through other means. This isn’t the same as having fifty dollars in cash stolen from your purse — for many, their card information is the key to all of their money. Luckily, card not present transaction systems are making new waves in fraud prevention. But before we take this for granted, let’s look into how these systems work — and for that matter, why fraud is such a huge problem online.
Why Is Online Fraud Such A Huge Issue?
It’s estimated that in the USA alone, card fraud costs people $8 billion annually. Card fraud is insidious. Often, people can lose money through card fraud and not notice until it’s too late. Alternately, experienced criminals can take a bit of money every month, making their theft so subtle that the card owner overlooks it. Now, in the case of 12% of card fraud, the first point of contact is online. Why is this? This is because, in terms of e-commerce, it’s become normalized for us to give out our card information without thinking. This isn’t to say that the site we’re giving our information to is the one looking to defraud you — rather, the issue is often that their security systems are not the best, and a hacker can breach these systems and take your information. Unfortunately, financial information is often not the only thing they are after.
Is Online Fraud Just About The Money?
If online fraud were solely about money, it would likely happen less often. When a criminal gains access to your card information, they can use that as a way to get access to other types of information surrounding your entire identity. In fact, in 2014 alone 54% of data breaches related to identity theft, 17% were financially motivated, and 11% were about account access. If a person steals your identity, they make it very difficult for you to recover your normal life and privacy. It’s a major violation, and can be hard to battle — and it’s often even harder to find the people responsible. Many do not think that this much information can be linked to our cards, but in fact it can be and often is. Think about how much information you have to give up to apply for a card — and how much information your bank has on you. That much is vulnerable when your card information is stolen.
How Do Secure Payment Gateways Benefit Merchants?
It seems that customers, not merchants have to worry about fraud. But e-commerce merchants in particular can be held responsible when their sites are hacked, and they certainly suffer financially. For that matter, when goods are bought with stolen cards, this is a form of theft — and the merchant who sells those goods is being victimized as well. Therefore, secure payment systems really do benefit everyone.