In the last couple of decades, technology & Internet boom have brought convenience and freedom. The concept of an online shop has revolutionized the way in which retail businesses function. The necessity of going and physically inspecting the desired products has been eliminated. This is pertinent especially in case of products that are standardized or have become standardized as a result. As online shopping has become more and more widespread it has also become equally effective. Active participation and reviews of online shoppers provide a better picture of the product than what was earlier portrayed by the seller. In such a manner primitive methods of deceit by retailers have been eliminated; unfortunately this boom has also brought along new and radical ways of fraud and theft.
Risks for online shoppers
The most common risk associated with making payments to an online shop is that fake websites and emails are extremely easy to fabricate. The goods and services that these websites propose to sell at dirt cheap rates to innocent online shoppers may not exist in reality at all. The lure of mind boggling offers promoted by such mediums is too tempting to resist and many shoppers fall for this trap. Another issue is when an online shop does not provide the goods as per the description provided when the purchase and payment was being done.
Payments made to an online shop over an unsecured network can also result in fraud and can be extremely risky in certain circumstances. An unsuspecting employee shopping online on the company network may expose the entire network and the security may be compromised. At an individual level, information can be gathered on shopping and browsing habits and tailored prices may be offered to the shopper. People are also often duped into providing banking and account information while making payments to an online shop. Hackers often trick shoppers into revealing such confidential information through emails that look official and genuine in nature.
Risks for merchants
Merchants themselves may be at the receiving end when frauds are committed from the customer end. Stolen cards and bank account information is used for making purchases in an online shop. A significant number of such fraudulent transactions require shipment to foreign countries. Customers may also dispute charges claiming that goods were not as per the standard description provided when the sale was made. The charge back that generally follows means increased processing and transaction cost and consequently reduced margins.
The following simple steps can be followed to minimize the risks that are associated with online payments:
- Online shopping and payments should be done only to a reputed online shop
- Replies should not be sent to emails from sources that are not recognized and that ask for confidential information such as bank details
- Payments should be made only through secure networks
- Some websites may also redirect to third party payment services; even these should be secure
- After payment is done to an online shop browser should be closed only after properly logging out
- Anti-spyware software and firewall should be active in the background while online payments are being done
- Bank as well as credit card statements should be routinely checked for ensuring that the correct amount is debited as well as for any unauthorized payment