E-commerce firms freeze anti-fraud spending despite revenue predictions
19 January 2011 - 09:21 by Sarah Collinson
UK retailers are apparently planning to cut or freeze the budgets which they dedicate to limiting the impact of online fraud, even though they are all expecting revenues to rise over the coming year.
This is according to a report published by CyberSource, which suggests the amount of money which is invested in making sure consumers can be confident of enjoying safe shopping online will drop.
Seventy-seven per cent of online retailers will post increased revenues in 2011, according to CyberSource director, Dr. Akif Khan, although none of this will persuade e-commerce firms to increase anti-fraud spending.
Dr. Kahn spoke to InfoSecurity Magazine about the report and pointed out that a budget boost would not necessarily result in a parallel increase in security and that, instead, e-commerce firms should look at improving their existing systems, to ensure that they are operating at the peak of their potential.
Experts believe that this can be achieved through automating the procedures which are currently handled manually, resulting in both decreased instances of fraud for the consumer and a cleaner, leaner model for security.
At the moment, card approval is reviewed manually by many firms, a process which is expensive and time consuming. A fifth of online orders are subjected to this process and of this segment, more than 70 per cent are approved, which, according to Dr. Kahn, means there is a lot of unnecessary waste.
It seems that e-commerce firms are essentially being urged to make efficiency savings rather than simply freeze budgets and hoping that existing systems hold out over the coming months. Consumers value the ability to carry out safe shopping online with firms they trust and if security of card transactions is streamlined without costing more money, then most would likely be in favour.