E-commerce and safety issues
By Vladimir Golubev
Date: August 11, 2003
It is understandable, that in introduction of electronic commerce, the safety issue is crucial, and the increase in plastic cards circulation makes a safety problem more and more critical. The level of fraud grows. The stolen cards data, shops completely disappearing from the market after successful fraud actions, the fictitious shops intended for gathering the information on cards and their owners, - all these are concomitants of today's e-commerce.
Fraud threat remains the basic obstacle for use of the Internet as means of commerce. People still do not consider the Internet as the safe environment. Pollings show that most of all people are afraid of potential data theft threat. According to VISA, about 24 % of e-commerce are not commited because of fear to enter the client's personal information required by e-shops. As the result, the Internet is mainly used as an information source. The little more than 3 % of all searches under catalogues and the databases in the Internet come to an end with purchases.
Some facts on e-commerce fraud.
"Cardholder Not Present" makes about 27 % of all chargeback (refusal of payment), generated in payment systems. We shall notice that e-commerce transactions take the second place among all kinds of fraud with credit cards use^; frauds with use of lost and stolen cards makes - 42 %^; and counterfeit cards makes - 23 %. It is necessary to note that creation and sending of a message "chargeback" cost $12-17 for the bank.
According to VISA the "chargeback" messages in e-commerce made 1-1,5 % in 2002. For comparison - the average volume of frauds in this payment system makes 0,3 %. According to the researches of Gartner Group, the level of e-commerce fraud in 14 times is higher, than at usual purchases with the help of plastic cards. The share of roguish transactions tends constant growth. Besides it is necessary to mean that e-commerce fraud has latent character as the most widespread strategy of swindlers is performance of transactions for the small sums which often remain the unnoticed by the victims.
The total amount of e-commerce transactions in systems VISA and MasterCard made about $75 billion in 2002.
Computer Crime Research Center
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