What e-commerce business owners need to know about cybersecurity?

In the rapidly expanding world of international e-commerce, cybersecurity has become a cornerstone of business success and customer trust.

With businesses transcending borders and reaching customers worldwide, they are increasingly exposed to sophisticated cyber threats, including fraud, data breaches, and phishing attacks.

These risks are amplified during peak shopping seasons, such as Black Friday and Cyber Monday, when transaction volumes surge and cybercriminals seek to exploit vulnerabilities.

For e-commerce businesses, safeguarding sensitive customer data and ensuring secure transactions are not just technical necessities—they are crucial to maintaining a competitive edge in the global market.

A robust cybersecurity framework not only protects businesses from financial losses and reputational damage but also fosters customer loyalty by providing a safe and reliable shopping experience.

As cyber threats evolve, so too must the strategies and technologies used to mitigate them, making cybersecurity an indispensable investment for international e-commerce success.

Use Advanced Fraud Detection Tools

Invest in fraud detection software that monitors transactions in real time. Look for tools with the following capabilities:

- AI-powered fraud detection: Platforms like Signifyd, Riskified, and Stripe Radar analyze customer behavior patterns.

- Geolocation verification: Ensures the buyer’s location matches the shipping and billing addresses.

- 3D Secure Authentication (3DS): Adds a verification layer for cardholders to confirm purchases.

Example of Fraud Detection Tools

Cheap:

• FraudLabs Pro: Offers a free plan for small businesses with basic fraud detection features. Paid plans start at $29.95€/month.
• NoFraud: Starts at $19€/month, suitable for low-volume merchants with simple fraud screening.

Middle-Tier:

• Kount Essentials: Pricing starts around $150€/month, offering AI-powered risk assessments and rule-based management.
• SEON: Costs start around $99€/month and includes email and IP checks, geolocation, and device fingerprinting.

Expensive:

• Riskified: Enterprise-level solution; pricing is typically based on a percentage of sales but is highly customizable and comprehensive.
• Signifyd: Known for guaranteed fraud protection, with plans tailored for larger businesses; costs vary but typically exceed $1,000€/month.

Set Strict Transaction Limits

To prevent large-scale fraud:

- Limit the quantity of high-demand products per transaction.

- Cap maximum order values for new customers.

- Flag or hold unusually large orders for manual review.

Implement Address Verification Services (AVS) as well as Card Verification Measures

AVS helps validate the billing address entered during checkout. Discrepancies between billing and shipping addresses could indicate potential fraud.

Ensure your payment gateway requires:

- CVV/CVC codes for every card transaction.

- Payment methods that support encryption and tokenization (e.g., Apple Pay, PayPal).

Example Address and Card Verification Services

Cheap:

• PayPal AVS: Free for merchants using PayPal. Automatically verifies billing addresses during transactions.
• Stripe Radar: Included in Stripe’s standard processing fee (2.9% + $0.30€ per transaction); AVS and card verification are built-in.

Middle-Tier:

• Authorize .net: AVS services included; monthly fees start at $25€ + transaction fees.
• BlueSnap: Offers AVS and fraud prevention as part of their all-in-one payment platform; transaction fees start at 2.9% + $0.30€.

Expensive:

• Cybersource Decision Manager: Enterprise-level AVS with advanced fraud detection. Pricing is custom and generally high for large-scale use.
• Adyen: High-end payment and fraud solutions; costs vary based on transaction volume and setup.

Blacklist Known Fraudulent IPs and Emails

Maintain and regularly update a blacklist of:

- Suspicious IP addresses and email domains.

- Repeat offenders from past events.

Employ Multi-Factor Authentication (MFA)

Require additional identity verification for:

- Orders flagged as high-risk.

- Buyers from regions with higher fraud rates.

Example Multi-Factor Authentication (MFA) softweres

Cheap:

• Google Authenticator: Free, supports basic 2FA for e-commerce platforms and accounts.
• Authy: Free for small-scale use; paid plans for businesses start at $0.09€ per user per month.

Middle-Tier:

• Duo Security (Duo MFA): Affordable plans start at $3€/user/month, offering user-friendly MFA for small and medium businesses.
• Okta Adaptive MFA: Starts at $4€/month per user, offering customizable authentication for mid-sized e-commerce operations.

Expensive:

• Ping Identity (PingID): Enterprise-level solution with pricing around $5€/user/month, tailored for global organizations.
• RSA SecurID: Robust MFA solutions with custom pricing, often exceeding $10,000€ annually for enterprise accounts.

Monitor for Red Flags

Set up alerts for:

- Orders with mismatched billing and shipping addresses.

- Buyers using free or disposable email domains.

- Repeated failed payment attempts.

Delay High-Risk Orders

Hold suspicious orders for manual review rather than automatic processing. During this review:

- Verify customer information by contacting them directly.

- Cross-check phone numbers, emails, and shipping addresses with available databases.

Partner with Reputable Shipping Companies

Work with carriers offering fraud protection features, such as:

- Address validation tools.

- Photo or signature proof of delivery to prevent chargebacks.

Strengthen Chargeback Management

- Keep detailed records: Retain copies of order confirmations, shipping documents, and communications.

- Respond promptly to disputes: A strong defense helps fight false chargebacks effectively.

Educate Your Team

Train your staff to:

- Identify common fraud patterns.

- Use your fraud prevention tools effectively.

- Know when to escalate reviews.

Offer Secure Payment Gateways

Encourage the use of secure payment options like:

- Verified credit cards.

- Escrow services for high-value transactions.

- PayPal’s Buyer and Seller Protection.

Secure Payment Gateways

Cheap:

• PayPal: Offers secure payments with no monthly fees (2.9% + $0.30€ per transaction).
• Square: No monthly fee; transaction fees are 2.9% + $0.30€.

Middle-Tier:

• Stripe: No monthly fees, competitive transaction fees (2.9% + $0.30€), and excellent developer tools.
• 2Checkout (now Verifone): Monthly fees start at $49€, suitable for small to medium businesses with international sales.

Expensive:

• Adyen: Offers robust international payment processing, fraud detection, and advanced reporting; fees depend on volume but are tailored for enterprises.
• Braintree (owned by PayPal): Custom pricing for high-volume merchants with advanced fraud tools and global payment support.

Communicate Clearly with Customers

Make your return and refund policies clear and accessible to reduce attempts to exploit them.

Key Considerations When Choosing a Solution

• Cheap Solutions: Suitable for startups or small businesses with low transaction volumes.
• Middle-Tier Solutions: Balance affordability and functionality for growing e-commerce shops.
• Expensive Solutions: Offer enterprise-grade features for large-scale operations with high volumes and complex fraud risks.

Selecting the right tool depends on your business size, budget, and the level of protection needed for your international operations.

Key Metrics to Track:

- Fraudulent attempt rate.

- Orders flagged for manual review.

- Chargeback ratio.

By proactively combining these measures, you can significantly reduce your risk of being targeted by spam buyers while maintaining smooth operations during the shopping frenzy.

In the next article I tell you how to implement all of this in just 10 days for international e-commerce businesses by focusing on easily deployable tools and prioritizing high-impact security measures, you can significantly reduce fraud risk within 10 days. While this is not a complete cybersecurity strategy, it provides a solid foundation for protecting your business during peak shopping periods like Black Friday.