No business venture is without risk. E-commerce is no different.
Fraud
Credit Card Fraud is an established criminal activity. It has been around since credit cards
were first introduced, and will probably be around as long as the cards are. As such, any
merchant accepting credit cards has a level of exposure to such fraud. Any transaction where
the customer isn't present to swipe their card or sign an authorisation slip carries a higher
risk than when the card and signature are sighted by the merchant. Simple strategies can be
put in place by merchants to minimize, but not completely eliminate the risk of fraud.
Businesses shipping goods to unknown customers face the highest risk of fraudulent transactions,
service based businesses with recurring payments from known customers face a much lower fraud
risk. With the appropriate mechanisms in place, all types of business can gain some benefit
from online credit transactions.
Meeting client expectations
One of the benefits of online systems is high availability. Since machines can operate
24 hrs a day, most e-commerce sites will accordingly. This breeds the expectation in
consumers of a 24hr service, and if that expectation is not met, they may turn elsewhere.
In some cases, being too successful can also breed problems. If an e-commerce system
goes live without the parent business preparing for any increase in production, customers
may be turned away, or face excessive delays. If this situation occurs, the time taken
to respond by adding the required resources may be long enough for word of mouth or poor
press to spread - effectively poisoning the public against your service. In Australia
there are already cases similar to this happening, and by the time the service was fixed,
its core client base was turned against it by poor experiences in the past.
