Security: the kingmaker of the ecommerce
The festive shopping season is nearly over. I hope you're ready.
I completed my shopping yesterday using what I've coined as TSE. That's Total Shopping Efficiency. To explain, I left my car, completed my shopping and was back in the car in under an hour. TSE ladies and gentlemen. But how was I able to accomplish such a feat of shopping skill? I'll let you into a secret. I'd already done 95% of my festive shop online.
And I'm not alone. According to analysts (source Experian and IMRG) online shopping is increasing dramatically. On Christmas Day itself it is expected to increase by 36% in the UK this year. That's a huge increase in real terms and shows the public’s ever increasing confidence in buying on the net.
Forrester Research predicted that the US would spend $89 billion online in November and December this year, accounting for 14% of all retail spending. This would include an estimated 3.4 million new consumers. For retailers and credit-card companies, these numbers are an indisputable Big Deal.
That spike was to be repeated to varying degrees across the world, particularly as frenzied spending such as Black Friday and Cyber Monday gained popularity (notoriety) beyond the US’s borders.
Such explosive holiday extravagance fits nicely with our voracious appetite for online spending as a whole. eMarketer recently claimed that worldwide business-to-consumer (B2C) ecommerce sales will increase by 20.1 % this year to hit a mind-boggling $1.500 trillion. Soaring use is being driven by, among other things, expanding online and mobile user bases in emerging markets, advancing shipping and payment options, and the relentless push by major brands into new international markets.
But while the excitement has been high going into the holiday season – whether among consumers seeking convenient bargains on-demand or the retail industry’s bean-counters – any heightened online activity also brings with it a barrage of new, unpredictable and complex risks.
While some cybercriminals will be looking at taking down big names with tactics like distributed denial-of-service (DDos) attacks (We’ve all been reading about Sony), others will be on the hunt for your personal data.
Last year, US retail giant Target took a very public hit after it was hacked over the xmas holiday, resulting in the disclosure of over 70 million credit cards and other customer data being “compromised.”
Far from being an isolated incident, a recent study by CNN Money reported that almost half of American adults had their personal information exposed in the past year. This includes things like debit/credit card numbers, passwords, phone numbers, email addresses, birthdays, physical address – you name it.
A key part of coping with the growing threat is shoring up mobile payments, which Gartner has forecast to grow around threefold by 2017 to around $721 billion worth of transactions by more than 450 million users. Much of that growth is down to holiday shopping. According to Forrester, mobile shopping shot up during key shopping dates last year, in particular on Thanksgiving and Cyber Monday. 34% and 38% of shoppers, respectively, said they used smartphones and tablets to shop. The figures stood at 21% and 23% in 2012, and the upward trend shows no signs of slowing.
For the end user, the ability to conduct payments on mobile is extremely convenient. For businesses and financial institutions, the convenience and security of mobile payments appeals for its ability to tap into new revenue streams, and enhance customer loyalty through programs that leverage consumers’ mobile data.
However, without some form of fraud protection, retailers are playing a dangerous game. Fortunately, there’s plenty they can do to protect both themselves and, crucially, their customers.
One of the available solutions starting to gain traction is the clientless online fraud protection system. This enables organisations to arm devices in real-time against all manner of online threats without the user having to do anything, snuffing out the danger of things like malicious HTML changes or script injections before the trouble starts.
Today, device and behavioural variables can be vividly put in the spotlight, seamlessly clearing the way for honest consumers to shop away while malware or nefarious bots are left out in the cold.
Switched on retailers can also give customers invaluable credit card peace of mind by using solutions that rigorously encrypt at the application level, ensuring that any data intercepted by troublemakers is impenetrable.
Security is the kingmaker of the ecommerce world. Those that get it will reap rewards and customer loyalty. Those that don’t will soon be overlooked.
With that in mind, shop safe and I hope you and yours have a fabulous festive holiday.