The holiday season is just around the corner, and retailers are expecting a surge in both in-person and online shopping this year. The profound effects that the COVID-19 outbreak had on the relationship between retail, ecommerce, and the payments industry has resulted in a new generation of criminals. Loss prevention teams have been forced to beef up their digital protections and become aware of rising trends in cybersecurity.
An increase in online and offline transactions means that the perfect opportunity exists for cybercriminals to intensify the scale of their attacks on financial institutions, organizations, and everyday people. This year, it is projected that ecommerce sales will account for a record high of 18.9 percent of all holiday season retail sales. With this substantial increase in purchasing activities drawing nearer, online payment platforms are at an even greater risk of becoming victimized by fraudsters.
Let’s take a look at why retail businesses should begin security preparations for the holiday season and how retailers can protect themselves against these attacks.
The Proliferation of Cyberattacks on Retail Businesses
Today, most online payments and accounting processors come with a variety of built-in security measures. Some of these measures might include utilizing SSL protocol and ensuring compliance with the PCI data security standards.
Simultaneously, large-scale security incidents have increased by 273 percent since the onset of the pandemic. This means that despite security measures, digital transactions and retail businesses are at a larger risk than ever before.
Another reason for the increase in attacks is the increase in the deployment of IoT devices for retail purposes. For example, a typical enterprise that consists of 5,000 employees could have as many as 20,000 IoT devices connected to the network. The more devices that are connected to a network, the larger the attack surface.
How to Protect Against Cyberattacks
In order to minimize online payment fraud, businesses must do everything they can to empower loss prevention and IT teams by offering payment processing services that are secure for the consumer while minimizing the possibility of chargebacks. It’s crucial that retail and ecommerce stores work with a developer that understands the intricacies of cybersecurity. Almost 60 percent of developers working today have fewer than five years of experience under their belt; so, here are some additional strategies that loss prevention teams can implement to reduce incidences of fraud:
1. Keep Up to Date With the Correct Patches and Updates
Hackers and cybercriminals are more likely to go after vulnerabilities that are well known and published across key pieces of digital infrastructure that host, serve, and feed data into ecommerce and payment applications. By installing the latest software updates and patches, these potential holes for attackers to enter can be filled to help reduce vulnerabilities.
2. Ensure Your Company Is Compliant With Security Standards
Any business that processes credit and debit card transactions online should be well aware of the importance of being compliant with the PCI encryption standards. Maintaining compliance is critical to reducing fraudulent transactions during the holiday season.
The PCI-DSS (Payment Card Industry Data Security Standard) includes a set of requirements to secure credit card data and other personal information that can be exposed online. By staying compliant, your company can more effectively ensure the safety of its online shoppers.
3. Use Multiple Verification Methods
Many retailers have yet to incorporate additional identity verification methods such as location-based digital identity elements and biometrics because they are afraid to increase customer friction during the checkout process. Communicating the benefits of additional verification can help ease the friction since this process benefits them directly.
More shoppers are using their smartphones to shop than ever before, both in store and online. In fact, 29 percent of in-store shoppers have taken advantage of touchless mobile payments since the coronavirus outbreak, and even more are taking advantage of mobile shopping apps.
While convenient, there are many hidden dangers when it comes to using a mobile device to shop online. Cybercriminals are able to exploit 89% of mobile device vulnerabilities without even having physical access to the device. Using multiple verification methods can help reduce mobile shopping fraud by asking for additional verification information if the payment system detects a suspicious device.
4. Instill Security Into DevOps and Block Bad Bots
As a part of a larger, more long-term goal, organizations should seek to ensure that every application update is analyzed carefully to prevent vulnerabilities. Additionally, using a newer API can help prevent browser skimming threats and next-gen firewalls can help close any other gaps.
When it comes to protecting against bot attacks, there are proactive steps that ecommerce retailers should take. These include blocking outdated user agents, blocking known proxy services, and blocking all access points.
5. Choose a Web Host That Offers SSL
There are many advantages that come with having an SSL certificate for a retail ecommerce website, but the most important one is so that your customer’s login, payment, and other personal data stays hidden from prying eyes. It also prevents hackers from injecting malicious code into your website and creating a major data breach.
Before you commit to a new web host, ask them these two important questions about their encryption protocols: Which SSL or TLS protocols are in place? And when does the certificate expire?
6. Ensure All Employees Understand Security Priorities
Employees must understand how important it is to be on the lookout for email phishing scams and other social engineering tactics. Research shows that 75 percent of data breaches involved phishing last year.
Additionally, it’s important that loss prevention professionals are aware of the many ways that employees can commit retail fraud by leveraging their knowledge of payment systems. Some of the ways employees can commit fraud are swapping out gift cards, diverting refunds, performing false cash returns, and even credit card fraud.