Consumer Attitudes About Ecommerce Security

Jul 28, 2017

In 2016, 15.4 million Americans were hit by online financial fraud, which was a 16% increase to $16 billion in stolen money. The fact that there was $1-billion climb from 2015 indicates that this type of fraud isn’t going to disappear soon, especially with the surging popularity of online shopping.

What Do Numbers Show?

According to pymnts.com, ecommerce fraud has gone down 35% since 2016. The increased use of machine learning was found to be one of the basic factors helping to reduce fraud across most industries. This doesn’t refer to department stores and jewelry stores. According to Radial, there’s a 55% growth in fraudulent activity through the last 12 months.

Based on the 2017 American Express Digital Payments Survey:

  • 37% of consumers abandoned an online purchase because they weren’t sure the transactions were secure
  • 47% of consumers increased their ecommerce purchasing frequency in 2016
  • Of over 1.000 consumers surveyed, 70% used a digital-payment service, such as a mobile wallet, one-click checkout button, or a person-to-person payment app
  • 41% always or sometimes use one of these digital-payments services when making payments

According to the Census Bureau of the U.S. Department of Commerce, in the 1st quarter, US ecommerce sales made up $105.7 billion, which is a 14.7% increase from the 2016 1st quarter. 81% of merchants consider online and mobile commerce as the biggest growth opportunity for their businesses.

Merchants spent 31% of their information-technology budgets on payments security in the past year, with 54% planning to invest more in 2018.

Of 71% of merchants having experienced increases in online and mobile sales in 2016, 58% state enhanced security features they used significantly accounted for sales increase.

Preventing Fraud

It’s highly important for merchants to turn to a secure and reliable merchant services provider like emerchantbroker.com for an ecommerce merchant account. EMB is voted the #1 high risk payment processor in the US and boasts an A+ rating with the BBB. EMB offers the lowest possible rates in the industry and helps merchants fight fraud without difficulty. EMB is rated A by Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016.

According to Mike Matan, AmEx vice president of industry engagement, product and marketing, a multilayered approach should be applied to fighting fraud, meaning fraud detection technology should be used or consumers should be required to enter a card verification code. One of AmEx’s services uses machine-learning algorithms to make a fraud-risk decision on AmEx transactions within two milliseconds.

Matan further notes that merchants can provide additional security measures. They can consider setting up security questions, a one-time password, or require customers to create a profile to complete a purchase.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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