Photo - Masaya Ueno, Director of Rakuten Asia and Malaysia Country Head for Rakuten Online Shopping
This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.
Over the past few years, e-commerce has been one of the fastest-growing sectors in Malaysia. In 2005, the Malaysian e-commerce industry contributed RM12.7 [US$3.52] billion towards our gross domestic product (GDP). According to a recent report by the national ICT agency Multimedia Development Corporation [MDeC], this number is expected to grow by 59 percent and contribute RM31.1 [US$8.652] billion to the GDP by 2020.
This probably isn't a surprise to anyone as Malaysians are natural online shoppers, purchasing everything imaginable, from apparel to electronics to groceries. This is evident from PayPal's recent survey that showed 73 percent of Malaysians have shopped online at least once a month. Unfortunately, cybercriminals have also zoomed in on this lucrative market and are cashing in on the e-commerce boom.
In 2012 the Commercial Crime Investigation Department recorded online shopping fraud losses of almost RM14.6 [US$4.05] million. A more recent report by Bank Negara indicates that unauthorised internet transactions are the most prevalent type of online scam. While these scams mainly targeted consumers, they affect merchants as well. A popular modus operandi used by cybercriminals is to trick merchants into sending unpaid goods using fraudulent payment emails.
As 2015 looks set to be an exciting year for Malaysia's rapidly growing e-commerce market, it's imperative for merchants and consumers to protect themselves from cybercrime.
A multi-pronged approach can be undertaken through specialized tools and education. Consider investing in fraud-screening tools such as IP geolocation, to identify discrepancies between the billing and actual address from which orders were placed. These tools are easy to implement and come with a high level of customisation to suit your industry and business. Capable of highly precise decisions by utilising many data sources and can run over 200 checks per second, these tools will be indispensable in combating fraud.
Another important consideration is processing electronic payments. To verify customer details, you can leverage external data sources, including an electoral roll. However, the simplest and most secure solution is to work with recognized financial institutions and payment companies. As partners, they offer robust user authentication for online transactions based on the latest security standards, staying ahead of potential threats such as the recent Heartbleed and Shellshock bugs which left many older platforms vulnerable.
In addition to this, partners can offer flexibility, understanding of the sector and business and a solution that can be optimised in real time.
Especially for SMEs and merchants new to e-commerce, one of the easiest ways to avoid these risks is to partner with a reputable online marketplace. Online marketplaces today have comprehensive measures to protect both merchants and customers, such as a systematic framework for identifying and verifying suspicious orders. As payment is a crucial aspect of e-commerce, marketplaces also have dedicated resources to educate merchants on security threats besides partnerships in place to provide back-end security.
Protecting your business from cybercriminals is only half the battle won. It's easy to overlook the simplest of online security checks, especially when you are a shopper hunting down the latest bargains. Dedicating a section of your store's FAQs to tips on how to protect against fraud, identity theft and other cyber threats can help to improve the overall experience for your consumers.
Here are some basic tips you can share:
1. Be alert and look out for any potential oddities in a website address (URL) before providing your personal and payment details. Things to look out for include additional dots in the URL or a misspelled merchant's name.
2. Beware of unsolicited spam/phishing emails. To minimize chances of being infected with malware, keyloggers or viruses, do not click on suspicious links or running programs from an unverified source.
Check your settings for online and social networks - are you sharing too much personal information online?
3. Turn up your privacy controls to protect your data on social networks, to prevent scammers committing fraud in your name.
4. Use highly rated security software (quick tip: always uninstall your previous antivirus before installing a new one!)
E-commerce is a game changer for both shoppers and merchants alike, promising greater benefits such as convenience and unparalleled reach for those that embrace it. However like all activity that happens on the internet, there are some risks involved. This extends an opportunity for e-commerce industry players, be it logistics or payments partners, to work together and nurture a trusted ecosystem.
Merchants and consumers have a part to play in fostering a safer online shopping environment, which can begin with something as simple as staying vigilant, and taking basic steps to stay safe online.
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