Ecommerce Security and Compliance Best Practices for Your Business
When we go shopping in a conventional store, we hardly expect to be targeted for theft. Indeed, shoppers are very rarely victims of crime while inside a store. Similarly, although the threat of holdup or robbery might be slightly higher for store operators, the chances of it happening are low.
Shoppers and vendors engaging in ecommerce, on the other hand, while enjoying the ease and convenience of trading from anywhere, are at much greater risk of being targeted. That’s a reality that can’t be ignored.
It’s unlikely that this will diminish the popularity of ecommerce in any way, due to the benefits, which greatly outweigh the risks. However, it does mean that merchants must take every step possible to safeguard their businesses and customers. Cybercrime is very real, meaning that nefarious activity and data leaks can result in financial and other losses.
What is Ecommerce Security?
In the ecommerce domain, security can mean several things. However, in the case of this article, we're talking primarily about securing sales transactions to protect your business and customers from fraudsters, hackers, and other cybercriminals.
In a traditional sales outlet, customers can walk in, pay for goods in cash, and walk out again without ever divulging personal information. Ecommerce, on the other hand, necessarily involves the collection of personal data.
Furthermore, depending on the processes used at the checkout, sensitive data relating to customer's payment details will be captured by, or at least pass through, your ecommerce system.
Therefore, it's incumbent upon your business to ensure none of this data passes into the virtual hands of those with no legal right to access it. In a nutshell, then, ecommerce security comprises the people, processes, and primarily, the systems executing protective measures to keep data protected.
What is the importance of Ecommerce Security?
If the definition of ecommerce security is not enough to convince you of its criticality, maybe it's beneficial to reflect on some specific reasons to take it seriously. Perhaps first and foremost, it may be a legal obligation.
Many countries have implemented data security compliance rules and regulations to which ecommerce enterprises must adhere. We'll discuss compliance in more detail later in this article.
For now, though, it's enough to say that as an ecommerce business, you have to protect your customers' personal and financial data. Neglecting that duty can cost your business much money, and possibly even jeopardize its existence.
Trust is Key to Ecommerce Success
Even without codes and regulations in place, there is the critical issue of trust to consider. Many consumers, for example, are not yet confident about the safety of shopping online. Even among the most tech-savvy millennials, the sheer volume of fraud incidences is enough to instill a sense of caution when conducting business online.
In short, then, if prospective customers are not confident that your ecommerce security measures are stringent, they will never become actual customers.
Furthermore, if your online store ever suffers a data security breach, and word gets out that it happened, customer defections may well follow. There is no recent research to indicate consumer sentiment statistics relating to the loss of trust after a data breach. However, a study in 2016 found that 64% of consumers would not transact with a business after such an incident.
Similarly, a report from data-management company SyncSort, says consumers are typically reluctant to share credit card information with a company that has suffered a data breach.
The High Price of Low Security
If the risk of losing customers' trust is concerning, a data breach's financial impact can be crippling. The average cost of a single lost or stolen customer-data record is close to $150 (USD), taking into account the following expenses that an affected business might incur:
- Fines for non-compliance with the payment card industry's data security standard (PCI DSS)
- Costs of notifying customers of the data breach
- Cost of reissuing credit or debit cards to victims of the breach
- Costs of investigating and remediating data weaknesses to prevent further incidents
When you add the reputational impact that typically goes along with any ecommerce security issues, it's easy to see why the risk of data compromise should be taken seriously.
Compliant Doesn’t Mean Secure—But it Helps
Before moving on to look at a few ecommerce security best practices, let's demystify this issue of compliance. It's necessary to do so because as essential as it is, compliance with standards such as PCI DSS doesn't guarantee your business 100% safety from cybersecurity incidents.
However, compliance does help to protect your business in several ways. For example, there is a clear financial benefit to complying with PCI DSS requirements. If your business is compliant, the chances of being hit with a hefty penalty after an ecommerce security incident are minimized.
PCI DSS compliance also engenders vital trust among your business’ customers, as will adherence to other industry standards and attaining ISO certification or similar endorsements.
As in any industry or commercial sector, though, meeting the requirements of standards such as PCI DSS and ISO should be considered the minimum level of protection necessary for your ecommerce data. It's always better to set your sights on exceeding, rather than merely complying with them.
Familiarity with them will help you compile your business’ compliance roadmap and check that your payment service provider (PSP) is PCI DSS compliant.
Know the PCI DSS Requirements
To comply with the primary requirements of the standard, you must:
- Protect your ecommerce systems with the use of firewalls.
- Configure passwords and settings.
- Safeguard all stored personal data belonging to debit or credit-card holders.
- Encrypt all cardholder data shared across public or open networks.
- You must use antivirus software and keep it updated.
- Regularly update and patch your ecommerce software systems.
- Assign a unique ID to every user of your ecommerce IT solutions.
- Restrict access to business data, especially that relating to customers.
- Maintain and manage logs for all your IT solutions.
- Perform penetration testing and vulnerability scanning.
- Maintain documentation detailing your ecommerce-security policies and procedures, and perform documented risk assessments.
- Restrict accessibility cardholder data, allowing access only to those in your business who need to know it.
A deep-dive into each of the above requirements is beyond this article’s scope, but the following sections explore some of the more valuable best practices in ecommerce security. These practices will support you in protecting your business and customers and assuring compliance with the PCI DSS.
4 Best Practices in Ecommerce Security
One element of ecommerce security that the PCI DSS does not stipulate, but which can be of great value in protecting sensitive personal and financial data, is education.
Best Practice #1: Educate Your Employees and Customers
While a written security policy may set out employees' and partners' obligations, it can be much more effective when supported by appropriate security training for your staff.
Of course, your customers are not under the control of your business, so initiatives to educate them about protecting their data while interacting with your site can be invaluable.
This education doesn’t have to be complicated. Just help your customers know how to identify suspicious activity related to their interactions with your website and communications, such as emails. Be sure to provide them with channels to inform you if they do come across anything suspicious.
Best Practice #2: Keep Your Website Updated
Many data breaches occur due to cybercrime, and the hackers who engage in this type of activity are nothing if not sophisticated. As soon as ecommerce software engineers identify a vulnerability and patch it, the cybercriminals either upgrade their capabilities to beat the patch, or seek a new weakness to exploit.
This conflict is endless. If you neglect to implement the latest software versions and patches, you’re opening the door to data compromise. Regular software updates are especially critical to implement if your ecommerce platform is housed on your business’ servers.
If you use one of the more well-known hosted platforms, your provider should take care of updates for you. When vetting possible new solutions, therefore, be sure to ask vendors about their strategy and approach to keeping on top of potential security vulnerabilities.
Best Practice #3: Focus on Password Power
Passwords are all that keep customers’ personal data, and that belonging to your business, under lock and key and safe from unauthorized access. However, it’s surprising how often people ignore the need for strong passwords to protect their information.
To prevent weak passwords from letting the wrong people into your databases, follow a few simple rules for password use and maintenance, and impress them upon your customers too:
Always use passwords of eight characters or more, and make sure they contain a mix of numbers, symbols, and upper and lower case letters.
Discourage, and preferably prohibit, any sharing of passwords.
Discourage also the use of the same password for access to multiple applications or platforms.
As a point of education, advise your staff and customers to be careful about the answers they choose to provide to security questions. The responses should be kept private. For instance, if somebody uses their mother’s maiden name to answer a security question, they should avoid divulging that information, for example, in social media dialog or posts.
Best Practice #4: Choose Your Payment Service Provider API Wisely
By choosing the right payment processor API, you can take a considerable amount of the ecommerce-security workload off your hands. Not all payment service providers are equal. While most of them offer APIs, many do not provide clarity about their benefits and drawbacks.
A reputable provider will give you access to API documentation before you commit to engaging its services. That will enable you to evaluate the tool and its security advantages.
Similarly, a good API will enable you to process credit card information without the data ever being stored on your system. It will protect your business using tokenization and fraud detection capabilities.
High-quality applications and solutions are integral to the success of ecommerce businesses. If there is one solution you should not compromise on, it’s the API through which your customers make payments for your products or services.
Secure Your Business, Protect Your Customers
You can’t take ecommerce security too seriously or invest in it too much—because a security breach can jeopardize your business. The smaller the company, the harder it will be to recover from an incident resulting in data theft or loss.
The boldest steps you can take are to:
- Cement an understanding of the risks present in the ecommerce domain
- Propagate the necessary skills and expertise among your workforce to counter the risks
- Educate your customers to exercise vigilance
- Follow the best practices outlined in this brief guide
They require an investment in time, money, and effort, but the payoff is clear. Each of these steps will increase your customers’ protection, build confidence in your brand, and contribute meaningfully to your online business’ success.