Managing E-Commerce Risk

Steps to Managing E-Commerce Risk - The following steps have been identified as those that are most important to managing e-commerce risk. These steps ( E-Commerce Start-Up, Web Site Utility, Fraud Prevention, Credit Card Acceptance, Cardholder Information Security Program, and Charge-back and Loss Recovery ) serve as a general framework for the best practices presented:

E-Commerce Start-Up

1- Know the risks and train your troops

Your exposure to e-commerce risk depends on your business policies, operational practices, fraud prevention and detection tools, security controls, and the type of goods or services you provide. Your entire organization should have a thorough understanding of the risks associated with any Internet transaction and should be well-versed in your unique risk management approach.

2- Select the right Acquirer  and service provider(s)

If you have not yet launched an electronic storefront, you need to partner with a Credit card Acquirer that can provide effective risk management support and demonstrate a thorough understanding of Internet fraud risk and liability.

You also want to take a good, hard look at any service provider before you sign a contract. The bottom line is  does the service provider have what it takes to keep your cardholder data safe and minimize fraud losses?

Web Site Utility

3- Develop essential Web site content

When designing your Web site, you should always keep operational needs and risk factors foremost in mind. Key areas to consider are privacy, reliability, refund policies, and customer service access.

4- Focus on risk reduction

Your sales order function can help you efficiently and securely address a number of risk concerns. You can capture essential Credit card and cardholder details through such actions as highlighting required transaction data fields and verifying Credit card and customer data that you receive through the Internet.

Fraud Prevention

5- Build internal fraud prevention

By understanding the purchasing habits of your Web site visitors, you can protect your business from high-risk transactions. The profitability of your virtual storefront depends on the internal strategies and controls you use to minimize fraud. To avoid losses, you need to build a risk management infrastructure, robust internal fraud avoidance files, and intelligent transaction controls.

6- Use Credit card tools

To reduce your exposure to e-commerce risk, you need to select and use the right combination of fraud prevention tools. Today, there are a number of options available to help you differentiate between a good customer and an online thief.

7- Apply fraud screening

Fraud-screening methods can help you minimize fraud for large-purchase amounts and for high-risk transactions. By screening online Credit card transactions carefully, you can avoid fraud activity before it results in a loss for your business.

8- Protect your merchant account from intrusion

Using sophisticated computers and high-tech smarts,criminals are gaining access to shopping cart and payment gateway processor systems, attacking vulnerable e-commerce merchant accounts, and committing merchant deposit fraud. By taking proactive measures, you can effectively minimize this kind of cyber-attack and the associated fraud risks.

Credit Card Acceptance

9- Create a sound process for routing authorizations

Before you accept Credit cards for online payment, you must ensure that you have a secure and efficient process in place to submit authorization requests through the Internet.

10- Be prepared to handle transactions post-authorization

There are a number of steps you can take to deal effectively with approved and declined authorizations before you fulfill an order. The idea here is to apply appropriate actions that best serve your business and the customer.

Cardholder Information Security Program

11- Safeguard cardholder data through CISP compliance

Credit Cardholder Information Security Program (CISP) provides e-commerce merchants with standards,procedures, and tools for data protection. For maximum security, you need reliable encryption capabilities for transaction data transmissions, effective internal controls to safeguard stored card and cardholder information, and a rigorous review of your security measures on a regular basis. The CISP digital dozen requirements can help you protect the integrity of your operations and earn the trust of your customers.

Charge-back and Loss Recovery

12- Avoid unnecessary chargebacks and processing costs

For your business, a chargeback translates into extra processing time and cost, a narrower profit margin for the sale, and possibly a loss of revenue. It is important to carefully track and manage the chargebacks that you receive, take steps to avoid future chargebacks, and know your representment rights.

13- Use collection efforts to recover losses

You can often recover unwarranted chargeback losses through a well-thought through collections system.


  1. Risks and obstacles will always be present no matter what the field. It's all about whether you have enough disaster recovery skills or not that will determine whether your business sinks or remains floating.

  2. You can always depend on inbound call center software when it comes to credit card issues. E-commerce is a wide array that looks like a set of dominoes, hit one and everything else is affected. So make sure that you are well-informed with the business that you have, not just in e-commerce because all businesses have risks.

  3. This has been extremely helpful especially for us that are just staring up an e-commerce business. We have prepared ourselves with the risks that came with it. Thankfully, the fulfillment services that we got has been very efficient in delivering good, quality business.

  4. Aside from integrating web’s quality design for using SEO techniques, some companies also include some itil service operation programs to make their sites more developed.

  5. A complete set of instructions on putting up an e-commerce site. The only thing that is missing from this is the reliability and consumer trust. This can be done easily though, just maintain a good and consistent customer service.

  6. I agree that we should train our troops really well. We can prevent many issues from building up and we can grow faster if they are properly trained.

  7. Information security is one of the most overlooked aspect in e commerce. It should be always in high priority. Several people just don't invest time and effort to know the ins and outs on how to secure their business. Its a bad decision if you start up without investing in security.

  8. These steps could help small business to prosper; one could also include SEO tips and techniques to further develop their sites and to attract more possible clients. With these tips and SEO techniques, surely it can make your business grow and viral over the internet.

  9. Just loop steps one to thirteen and you have a business process improvement plan. The proper guidelines are there. All that it needs is how to modify it to adapt to change. We all know that e-commerce is about adapting to change with all the improvements with our technology.

  10. E-commerce is something that is abound today that business entrepreneurs think they don't need these information that you posted. Business start-ups should have a guide like this one.

  11. Great step by step guide. You've made a wonderful list that has guidelines that help and pinpoint future problems. Application is the only thing missing here.

  12. Since the advent of SEO, the marketing strategies have improved significantly. Because of this, more companies and businesses have used SEO as a means to increase clientele coverage. There is also a significant increase of online shops that utilizes the help of freight services in delivery of products and goods.

  13. Should hardware protection and data backup be included on the list? It is also essential to E-Commerce. Data backup is easier to deal with because of emergence of cloud networking.

  14. That is so informative! Reading articles like this really gives me all the information I needed to know. Thank you!

  15. Great post! managing an eCommerce site is a heck of a lot trickier than everyone thinks. If you have fulfillment services involved the best advice I can give you is make sure your drop shipper understands your customers needs!


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