Additionally, some threats are fairly unique to e-commerce, such as the complete interruption of services as a result of hackers or loss of digital services. This means properly safeguarding your e-commerce is of the utmost importance. Here’s what you need to know to do so.
Understanding E-Commerce Security Threats
Cybersecurity threats are constantly evolving. Bad actors are developing new and more effective means of stealing valuable assets from e-commerce businesses, with these assets including everything from passwords to customer information to money. As such, it’s vital to be aware of both existing and evolving cybersecurity threats.
Common Types of E-Commerce Fraud
E-commerce fraud — which involves someone engaging in an illegal online transaction, typically using stolen information — comes in many different varieties. However, some of the most common types include:
- Payment fraud involves using stolen card or bank information to pay for online services or products.
- Account takeover involves gaining access to another person’s account.
- Refund fraud involves lying about defects with a product or seeking a refund for a product or service you didn’t purchase.
- Chargeback fraud, or friendly fraud, involves convincing your credit card company to refund a purchase under false pretences.
- Card testing fraud involves testing stolen credit card information by making small purchases to determine whether funds are available for larger purchases.
Losses for e-commerce businesses related to online payment fraud totalled more than 30.5 billion British pounds worldwide in 2022. As a result, experts project that the e-commerce fraud detection and prevention market will grow more than two-fold between 2023 and 2027
Malware and Its Impact on E-Commerce Sites
Malicious software, or malware, is one of the most common tools used by bad actors to target e-commerce platforms. Common types of malware include:
- Spyware collects information from the target’s devices and shares that information with the bad actor.
- Ransomware blocks access to a system until the user pays a ransom.
- Trojans are a type of software that bad actors try to pass off as legitimate to gain access to a system.
- Keyloggers record every keystroke made by the target.
- Worms make copies of themselves and spread across devices in a network.
Malware can compromise a wide range of sensitive information, from customer data to business security information. This can not only result in the exposure of private information but also damage to the business’s reputation.
Data Privacy Regulations and E-Commerce Compliance
Data privacy measures are not simply a matter of your own or your organisation’s preferences. Some data privacy measures are enforced by laws and the standards of regulatory bodies. This is because data breaches can have far-reaching consequences beyond the individual company’s bottom line. Some of the most notable laws regulating data privacy are the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act.
Failure to abide by applicable laws and regulations can result in steep fines, various sanctions, or even criminal charges, depending on the parameters of the specific law being violated. Compliance efforts can be particularly complex for B2B companies, which often have to ensure compliance under a variety of regulatory umbrellas as they purchase or resell goods and services, or otherwise conduct business in different localities.
Key Requirements for Data Protection Compliance
Laws relating to data privacy vary depending on the area in which you’re doing business. However, some common standards for compliance include:
- Ensuring consumers are aware of what data is being collected, how it’s being collected, and how it’s being used;
- Allowing consumers to access their data, correct information, and have their personal data erased from company records;
- Allowing for data portability upon consumer request;
- Minimising data collection;
- Holding accountability for data exposure;
- Abiding by minimum standards for protecting sensitive data, like the use of secure hosting services and dedicated servers.
Again, however, the specifics of data privacy regulations can vary widely depending on your locality. Ultimately, it’s important to understand which of your business operations may fall under the purview of data privacy laws or relevant regulatory bodies and to ensure that you understand those compliance standards.
Essential Security Measures for E-Commerce Websites
Ideally, e-commerce businesses should use layers of redundant security to provide comprehensive protection for their operations and valuable assets. This will involve some strong basic protocols as well as measures unique to their individual business’s operations and needs. Businesses will often benefit from an audit by a cybersecurity professional to identify vulnerabilities.
Here’s a closer look at some effective security measures you can take.
Secure Payment Processing
The Payment Card Industry Data Security Standard (PCI DSS) is a standard set and enforced by the Payment Card Industry Security Standards Council, which credit card companies are required to follow. Audits for compliance may occur annually or quarterly. These standards are meant to protect credit card information as it’s transmitted and stored.
The PCI DSS has twelve minimum requirements:
- Maintain a secure firewall.
- Do not use default passwords.
- Keep cardholder data private and secure.
- Encrypt data across public networks.
- Maintain updated virus protection software.
- Maintain secure systems.
- Restrict access to cardholder data on a need-to-know basis.
- Assign a unique ID to each individual with access to secure data.
- Restrict physical access to data.
- Monitor every instance of network access.
- Regularly test and review security systems.
- Maintain an information security policy.
Major credit card brands typically develop their own specific standards for information security that use the PCI DSS as the minimum standard.
Implementing Strong Authentication Methods
One of the most basic and useful methods for maintaining information security is by implementing strong authentication methods. This includes security systems like password protection, biometric authentication, and device authentication.
Typically, it’s recommended that businesses use two-factor or multifactor authentication to further improve upon the security these methods offer. These require two or more forms of authentication, making it more difficult for bad actors to obtain the necessary access information.
Regular Security Audits and Vulnerability Assessments
Installing security programs and implementing protocols alone is not enough. You also need to manage and routinely update them once they’re in place. Efforts such as security audits and vulnerability assessments can determine any aspects of your security network that have deteriorated or otherwise need to be updated.
These should be done regularly to avoid postponements that could allow security threats to emerge unchecked. Further, audits should be standardised and involve the input of cybersecurity professionals who are experienced in conducting such assessments.
Educating Customers and Employees on Security Best Practices
One of the most important ways you can enforce security and protect assets is by providing education to employees and customers about security threats. Some effective ways you can achieve this include:
- Create clear procedures and protocols.
- Conduct regular training to review security standards and procedures.
- Send out educational materials.
- Show examples of attempted or successful breaches made by bad actors.
- Update employees and customers about ongoing threats as they emerge.
Cybersecurity concerns and best practices must be an ongoing conversation inside and outside your organisation.
Future Trends in E-Commerce Security
Cybersecurity efforts in e-commerce are constantly evolving, and you can proactively protect your business if you have any idea of how they may evolve over time. Most notably, artificial intelligence — as well as virtual reality and augmented reality technologies — are likely to change the game for both cyber criminals and cybersecurity. These technologies will improve upon existing programs and strategies, as well as allow for the development of entirely new tools. As such, e-commerce websites should particularly monitor developments in this area, as well as evolutions in the field of cybersecurity at large.
