Risk Involved in E-Payment and How it can be Handled?
Risk Involved in E-Payment and How it can be Handled?
E- Payment
E-payments are a type of digital or electronic money transfer. In essence, you have the option to send money using electronic payment methods instead of cash. Depending on your needs, you can utilize a variety of electronic payment methods in India.
Credit and debit cards, mobile wallets, UPI, internet and mobile banking, and many other options are among the several kinds of e-payment. To use e-payment solutions and pay for different goods and services, all you need is a bank account and a device that can connect to the internet.
Risk of E-Payments
From the viewpoint of the customer:
Fraud
Fraud is a problem with electronic payment systems. Typically, a password must be entered and occasionally, security questions must be answered before making a payment. The genuine identity of the transaction’s maker cannot be confirmed. The system assumes that the authentic person is logged in as long as the password and security questions are accurate. If scammers get their hands on this information, they can steal the money.
Impulse Purchases
Electronic payment methods, especially online, stimulate impulse spending. Customers are more likely to decide to buy an item they find on sale online because it will only take one click to pay with a credit card. Impulsive purchasing is a drawback of electronic payment methods that results in disordered budgeting.
From the viewpoint of the user:
From the standpoint of financial service providers:
Tax Avoidance
According to the law, companies must give the government copies of their financial documents so that it can check their tax compliance. The efforts of tax collection, however, can be hampered by electronic payment. The government might not know the truth if a business doesn’t disclose all of the electronic payments it’s made or received throughout the tax period; this could lead to tax evasion.
Payment Discord
Conflicts over payments frequently emerge because they are processed automatically, which makes it susceptible to mistakes. This is particularly typical when payments are made often to numerous recipients. These technological issues or anomalies could result in a conflict if you don’t examine your pay stub at the conclusion of each pay period.
ACTIONS TO LOWER THE RISK OF E-PAYMENTS
Obtain and sustain PCI Compliance.
All online merchants and their customers should be protected from fraud and data breaches thanks to the Payment Card Industry’s Data Security Standard (PCI DSS), which is a collection of regulations and procedures. A crucial first step in securing your eCommerce business is achieving and maintaining compliance via the PCI Compliance Guide. In fact, failure to comply could lead to severe fines and, ultimately, the loss of services from respected eCommerce providers.
Recognize any indications of irregular behavior.
USE SET
AVS:
Address Verification System is an automated fraud protection technique that lowers the risk for retailers selling in “card-not-present” environments, such as those involving online or telephone purchases. The billing address included in the transaction is compared to any additional addresses registered with the issuing bank by AVS. The consumer’s billing and shipping addresses should be requested by the merchant so that an AVS check can be performed before a transaction is accepted.
CVV:
The three-digit security code displayed on the back of a credit or debit card is called the Card Verification Value (in the case of American Express, four digits on the card front). Thieves cannot access it as readily until they have the card in their possession because it is not embossed or stored on the magnetic strip of the card. It is referred to as a CVV2 by Visa, a CVC2 by MasterCard, and a CID by American Express.
Geolocation by IP Address:
This can be used to pinpoint a customer’s exact location or calculate the distance between the customer’s billing address and the customer’s real location when they place an online order. As a result, it serves as an additional authentication step or verification mechanism for transactions that have a substantial distance discrepancy. The information provided by geolocation technology helps online business owners decide which transactions to thoroughly investigate and which to close. This results in a balance between the risks of losses brought on by fraud and the danger of deterring honest customers from making transactions.
In Conclusion
Managing risk and lowering it can be learned by doing a risk management course or PG in Risk Management (PGDRM). Being a master in risk management, you can avoid many risks which may harm your company in future. Being a risk professional gives you many opportunities in growing your career as a risk manager. It’s a short-term course with a high salary.
By doing a masters course on risk management you can learn how to manage these electronic risks. Global Risk Management Institute provides a PG in Risk Management course (PGDRM) . It’s a one-year full-time classroom course. This course teaches you all the methods on how to manage your risk in an organization. Risk management certification helps in learning about different aspects of risk management in not only cyber security but also IT, Operational, Finance, Strategy, third Party and Compliance. Risk Management as a profession I.e., PG in Risk Management (PGDRM) is a job-oriented course after graduation. Many companies hire risk professionals to maintain and grow the profits of the company and to avoid risks which may harm their business.
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