E-Commerce has been on an unprecedented growth trajectory since the beginning of 2020. In the fourth quarter, consumers spent roughly 30% more online, year-over-year.[i] Middle-market businesses that were already online have refocused their energy on their online presence to meet this increased demand, while newcomers have scrambled to establish their e-commerce offerings.
The Increasing Cost of Fraud
The pandemic has shifted shopping away from traditional brick-and-mortar stores to help keep us all safer. As businesses have moved from traditional brick-and-mortar storefronts to the digital world, criminal activity on the internet, which was already on the rise, has expanded at an increasing rate. With this omnipresent threat, it is more critical than ever before that we bring a renewed focus and awareness to the very real risks of doing business online.
According to research conducted by LexisNexis US, mid-large retailers have seen a ~43% – 48% increase in fraud attempts since 2019. Costs have also risen, with every $1 in fraud now costing $3.36 compared to $3.13 in 2019.[ii]
Fraud and a Security Mindset
Fraud comes in different flavors, necessitating a multi-faceted approach to combat the challenges posed. Defense in depth promotes a layered approach to security. It encourages baking security into business processes, a culture of security, and responsibility and ownership of all team members to improve a company’s security posture.
The OWASP Top Ten, PCI and PII familiarity, Vulnerability Scanning Tools, Code Reviews and Static Code Analysis are all good starting points to move your business in a more secure direction. For platforms and ERP-backed e-commerce websites, it’s also worth reviewing the service offerings for your platform.
Microsoft Dynamics 365 Commerce Fraud Protection
Microsoft Dynamics 365 Commerce (D365 Commerce), for example, has a robust Fraud Protection service offering that helps protect revenue and guard your business’ reputation.
Purchase protection on the D365 Commerce platform leverages artificial intelligence (AI) coupled with historical data and a sophisticated, customizable, rules engine to add security to evaluate transactions and protect against fraudulent activity on your site. Flexibility in the process allows for putting orders on hold pending a manual review. The detection also reduces potential issues with the bank, as rejected orders are not sent to payment processors for authorization if they are rejected by D365 Commerce.
Account protection is another component of D365 Commerce Fraud Protection. It focuses on issues such as fake accounts and fraudulent access to user accounts. An analysis is performed during the account creation and login process to provide a risk assessment tailored to your business needs. Suspicious activity can be blocked or challenged.
Loss prevention addresses omni-channel risks associated with lost revenue due to such things as improper discounts and returns. Using data analysis the cloud-based system looks for anomalies in the data that could represent fraudulent activity. Returns, improper discounts, merchandise mishandling and inventory turn-over are among the events that loss prevention helps monitor using AI to benefit the bottom line.
Fraud protection is a service that you get out-of-box with your D365 Commerce license. At present the following limits are imposed on this free option:
- Purchase protection – Up to 2,000 assessments per month.
- Account protection – Up to 20,000 assessments per month.
- Loss prevention – Up to 8,000 transactions per month.
If your business needs call for higher usage limits and you would like to explore additional Fraud Protection add-ons, you can do so for an additional fee. For more details about D365 Fraud Protection and its integration with D365 Commerce, click here.
Stay Safe Online in 2021 and Beyond!
If you would like help evaluating or improving your e-commerce security posture, please reach out to the e-commerce team at RSM. We are here to listen, advise, and guide you towards a more secure e-commerce solution for you and your customers. RSM has helped a number of companies bring their e-commerce vision to life.
RSM offers end-to-end e-commerce and digital marketing capabilities, with decades of experience. Our team stands ready to help you in the B2B and B2C space, with integrating various third party e-commerce platforms, from POS to ERP, extending and customizing ERP systems, developing ground-up solutions for your web store or customer portal, designing intuitive and inviting user interfaces and launching engaging digital campaigns.