The Challenges of E-Commerce Payments

As one of the most popular segments of shopping today, online purchases account for thousands of transactions each minute. The high number of customers who enjoy buying what they need from the comfort of home or ease of their mobile devices means the demand for reliable payment processing is growing. Some of the financial companies willing to take on the challenges of e-commerce payments are those that cater to High Risk Merchants, such as Payment Key Stone. Let’s take a look at some of the implications online transactions can have for businesses.

Fraud Potential High

Because customers are not standing in front of an employee at the register of a bricks-and-mortar store, the potential for fraud is higher in online purchases. There are limited ways in which merchants involved in e-commerce can ascertain that the person using a credit card is authorized to make a purchase. Though many online forms used for completing transactions ask for personal details, they are not exactly highly personal or confidential pieces of information. Plus, a purchase made using a stolen credit card is likely to be denied later by a bank, but not before the merchant has lost the money. Because of this heightened opportunity for fraud, e-commerce sites might be considered high-risk merchants.

Privacy a Concern

There are reports in the news all the time that a hacker has breached the security features put in place by large retail companies. These computer experts are able to garner all kinds of personal and financial information about customers during these security violations, and the threat of identity theft becomes exponentially higher. Information provided by consumers during online purchases are always touted as being secure and encrypted, but this often turns out to be not the case.

International Transactions

Purchases made at online sites may be completed by buyers in any country around the globe that has the necessary Internet access. Firewalls in these places might not be as tightly constructed as in other nations. Plus, there is the added complication of multiple types of currency that may or may not be accepted by an online merchant. The threat of fraud can be higher and the number of legal options for refunds can be lower for these transactions. Because of these unknowns, international retailers may need help designed for high-risk merchants.

Illegal Purchases

It’s been said that anything one could imagine is available for sale online. Many illegal items can be purchased without any identifying information about the customer being gathered by the seller. Or, legal items bought using e-commerce may later be used during a crime, and there are no repercussions for the merchant, who did not monitor whom he was selling merchandise to. Underage buyers or criminals may gain access to things that are off-limits to them by purchasing them through e-commerce sites.

The nature of online-only sales outlets means there is an inherently higher risk of fraud or illegality possible in their sales transactions. Because of this, they often must turn to payment processing companies that are willing to work with high-risk merchants. There are several companies that offer these services, and business owners may do well to investigate and eventually contract with one of them for online credit card processing services.

John Trinh has been writing for 10+ years. He has enjoyed writing about business, marketing and anything that he thinks he should write.