eCommerce is a big platform, increasing at an unparalleled pace globally; it constitutes a substantial possibility for brands and businesses to sell their goods and services. Consumers in recent times can purchase online products with multiple choices of brands at their ease and comfort. This gives customers an upper edge for an appropriate decision as they can do comparative pricing at a lesser cost without middleman intervention, thereby supporting eCommerce giants to perform at their best. Owing to this, there is an upward trend in online shopping in the last few years and eCommerce is undoubtedly the booming sector in online business.
The rapid expansion of online sales has introduced many competitors and significant contribution comes from online merchants like Amazon, Alibaba, eBay, etc. Online merchants are exploring multiple ways to generate additional traffic and sales. Hence the companies are creating numerous marketing strategies to increase their sales such as holiday sales, Black Friday sales, cyber sales, and much more to generate surplus traffic and sales. eCommerce can provide tremendous advantages if the company can differentiate amongst the genuine customers and fraudsters who are trying to escape amidst the multitude. With eCommerce growth, online fraud is also growing with skilled fraudsters using technology to hack systems, and criminals are continuously leveraging new types of sophisticated frauds.
When a fraudster leverages embezzled payment details or fraudulently obtained bank account or credit card accounts to attempt or make online or retail transactions without the consent of the account or card owner is eCommerce fraud.
Major eCommerce frauds
Merchant Identity Fraud – Fraudsters create fake identities establishing a merchant account that appears to be an authentic business. Furthermore, they rob stolen credit card information to conduct multiple charges then proceed with the earnings prior the cardholder comprehends they have illicit transactions on their accounts and cannot retrieve the funds and held responsible for the damage and penalty.
Friendly Fraud or Chargeback Fraud – Customer pays for the online products using a debit card or credit card. In addition, they intentionally charge-back post after receiving the products declaring they never got the goods. Later, the customer is given a refund moreover the customer keeps the goods that they stated never received. Most of the time, the commodities are sold again to get money.
The other types of eCommerce frauds are Phishing, Clean fraud, Page Jacking, Affiliate Fraud, Triangulation Fraud, and Supplier Identity Fraud.
Online payments, digital wallets are luring more attention from cyber-criminals due to the prevailing limitations making this kind of fraud swift and simple to conduct which is quite often overlooked and unseen by users. Simple and easy pin passwords, non-coded data leverages hackers to exploit more and steal personal details and identities. Therefore, it is imperative for businesses to adapt to eCommerce fraud trends, monitor and analyze them to alleviate fraud risks and vulnerabilities.
In the current scenario, digital evolution is the critical factor for most of the enterprises and their expansion in the market who are embracing new technologies thereby shifting towards merging cashless economy, cloud deployment, mobility, an outbreak of Internet of things (IoT), and automation. The amalgamation of all these systems and technologies is enabling a data-controlled method to mitigate several financial risks and fraud threats throughout the financial landscape.
To combat and alleviate eCommerce frauds some far-sighted measures like ML, AI, IoT, and automation are adopted. eCommerce in the fraud space must be given the required attention and protection with the EFM platform, integrated with advanced technologies, cognitive learning, and automated tools helping to battle and block online frauds from digitalization.