Risk management is the process of tracking and evaluating risk levels in a given organization. The results of the tracking process are used to create new risk prevention strategies and improve old ones if they’ve proven ineffective.
Why Risk Management is Important in Ecommerce?
Risk management is important in all industries. Ecommerce is no exception. Not only does it allow the organization to operate more safely, but it also allows the customers to do business carefree. Why is working in eCommerce so risky?
We’ll let the eCommerce fraud statistics tell the whole story:
More than 24 billion are lost every year in fraudulent credit card transactions
In 2018, credit card fraud has grown more than 18% and is continuing to increase
The credit card chargebacks rates are rising approximately 20% on a yearly level
Some eCommerce store owners feel that putting an emphasis on their business in the early stages will only hinder their growth. What’s more, they feel like during the first few years, concentrating on business aspects such as advertising and branding is much more important.
That couldn’t be further from the truth. A recent PwC study discovered that companies that emphasized risk management early on have a better chance of growing their business and increasing their profit margins in the process.
Typical Risks for Ecommerce Merchants
Online fraud and security breaches cost the eCommerce industry billions of dollars every year. This makes it crucial for businesses of all sizes to understand the risks of doing business online and develop an internal policy to address some of the biggest risks.
Merchants also need to train their staff members to act accordingly to minimize the damage caused by various security risks. To do this, staff members need to know some of the typical risks eCommerce stores encounter.
Some of the biggest – and most often – security risks in eCommerce are:
Online fraud in which a fraudster uses a stolen credit card to purchase goods
Data leaks caused by hackers who intercept an account during card processing
Accessing the merchant service provider’s payment processing system to steal data
Those are just some of the most frequent risks of doing business online. There are, in fact, many more. Risk management will help your organization alleviate these risks and even improve its operation. Let’s see how…
Managing Risk for Greater Profit with TechToPay
Is there a quick way to minimize all of these risks? The best way is to use a service that will help you minimize your losses and increase valid transactions at the same time. If that’s what you’re looking for, TechToPay is the right service for you.
With advanced risk monitoring features, TechToPay allows merchants to detect fraudsters and decrease chargebacks without affecting their conversions in the process. Using velocity rules, automated KYC/KYB checks, and even biometrics, it verifies customers in seconds.
Additional risk-minimizing features TechToPay offers include:
1. Tools That Will Maximize Your Revenue
The technology will help you protect your store from suspicious activities automatically. TechToPay achieves this by flagging any suspicious activity it detects and notifying your employees, encouraging them to take a closer look.
2. Fraud Detection Tailored to Your Needs
When it comes to risk detection, monitoring, and prevention, different stores have different needs. The creators of TechToPay recognize this. That’s why their set of tools allows store owners to set detection rules in accordance with their industry and customers.
3. Ever-Evolving Fraud Detection Features
Fraudsters are always coming up with different ways of scamming unsuspected store owners and their customers. TechToPay is constantly on the lookout for new fraud techniques. The company updates its software accordingly to keep its features prepared for any threat.
Benefits of Risk Monitoring for Ecommerce
TechToPay often deals with customers who don’t think they have any risk problems whatsoever. For these merchants, risk management is a luxury they don’t feel like they can afford, let alone need. They feel like a company needs to grow to a certain size before feeling chargebacks. As you might expect, these merchants are wrong. A platform like TechToPay can
help you maximize your profits, turn one-time visitors into loyal customers, and of course, cut operation costs significantly. Let’s look at the benefits in detail:
1. Increase Profits by Lowering Chargebacks
Even if you optimize your payments process to perfection, you still have to deal with refunds and chargebacks. These are the two main drivers of the loss of revenue. A provider like TechToPay will help you identify chargeback indicators in your system and prevent them before a significant number of them occur.
2. Maximize Your Store’s Cash Flow
Some store owners assume that they’ll receive money from a sale the same day. However, this rarely happens. Some need to wait for a few days. A risk management system employs a number of safety measurements that prevents fraudsters from disrupting your cash flow. It achieves this by blocking fraudulent transactions and holding some of your funds in reserve.
3. Save Work Hours with Automated Reviews
Auto-approving all of your transactions without having risk management mechanisms in place aren’t recommendable. On the other hand, reviewing all of the transactions manually requires having a team of experienced customer agents on board to handle all of the queries. With a risk management system in place, you can check most transactions automatically and save hours.
For small stores, risk management may seem like a luxury at first. But once you realize how much money and hours you can save using a platform like TechToPay, you understand that risk management is something worth looking into