Commentary: Why aren't more Net users shopping online?

With the media focusing on criminals stealing consumers' identities and credit cards, the public at large is still afraid of online shopping. But, there is a way to protect your business from e-thieves says Net consultant Jan Davis.

The Digital Economy has passed through its first developmental phase--one of experimentation. However, before the second phase of true e-commerce can become a reality, robust authentication services are needed to securely enable the growing number of online transactions.

Already, more than 59 million people have online access. We feel comfortable going online for free information, like weather predictions or movie times; but only 5 percent of us in the online community actually make a purchase on any given day.

So, why aren't more people making purchases online? It is certainly not a lack of opportunities on the Internet. There are many, many e-retail outlets from which you can buy anything from airline tickets to zippers.

What's stopping most potential shoppers from the experience is a surge in "e-thieves". With the media attention focused lately on the numerous cases of criminals stealing consumers' identities and making illegitimate purchases, the public at large is afraid to release credit and personal information on the Internet.

But, there is a way to protect both yourself as an individual and your business. The use of the right authentication system can help you realize the true potential of e-commerce, and in the process reduce the risk from fraud while encouraging business growth and increased profitability.

Reducing the chances of online fraud
Authentication is a process for identifying individuals as part of an online transaction. It reduces the risk of fraud through a process of questions and answers that happen in real time. The responses are compared to information residing in a comprehensive database that is secure and reliable. It is important for businesses and organizations to know with whom they are doing business.

In order to determine more about your authentication needs, ask yourself the following:

* Does an authentication system make sense for my site?
The level of authentication you need is based on the value of your products and the method by which your transactions occur. For example, an online book site will need to verify the basics such as address and credit card number, while an online banking site will need a much higher level of security to ensure that money decisions are being made by the true owner of the account. Similarly, a site offering age-restricted content may require a less stringent level of authentication versus one offering access to highly sensitive data, such as personal medical information.

*How secure is the system?
It is important to ensure that your system is protected with sufficient types and layers of security so unauthorized individuals cannot get into the site and find ways around the authentication. Talk with your authentication supplier about different options for protection and security.

* How protected is the customer data?
The line between privacy and security is thin. Though consumers want to give some personal information in order to take advantage of the ease and convenience of completing a transaction online, they also are concerned about releasing that information to a site. Be sure to explain clearly to consumers on the site that the information is used for authentication purposes only; and indicate whether their information is stored on the site or if it may be sold to other businesses. These practices should also be articulated in your site's privacy policy.

* Is the data reliable?
Having the most up-to-date information about your customers is crucial in authentication. A service using highly dynamic data, such as information from one of the national credit reporting agencies, is a powerful authentication tool. Their data is reliable, secure and updated frequently. You can contact any of the three major credit-reporting agencies to find out about their authentication services.

* How quick is the process; is it built into the transaction or must the customer go to a separate site for completion?
Keep in mind the customer experience when incorporating authentication into your site. You want to make sure that the process is relatively simple, seamless and as accurate as possible so that consumers will realize the benefits and not view it as a burden that deters them from proceeding with transactions on your site.

* Can I get consultative help from my supplier?
Be sure to find out from your authentication supplier about the extent of their service. They can help determine what type of system best fits your needs and how to initially implement it. And, you may also need help down the line with upgrades and maintenance, as well as varied expansion options if your business grows or changes. In addition, you should determine the availability and pricing for all aspects and stages of the project, such as solution configuration, systems integration, implementation, service and support.

By demonstrating to customers that you are willing to invest both time and resources to help protect them against identity theft and online credit card fraud, you are helping to strengthen customer loyalty and build trust. And, in the process, you will also be protecting your own business against costly fraudulent activity.

Jan L Davis is president of RocketBridge, a business unit of global solutions provider Trans Union LLC. The company specializes in facilitating secure transactions over intranets, extranets, and the Internet.

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