The Implications Of Credit Card Fraud For The Consumer And The E-commerce Industry

Essay by PaperNerd ContributorUniversity, Master's September 2001

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The implications of credit card fraud for the consumer and the e-commerce industry A - Describing the Issue Currently everyone talks about online shopping and electronic-commerce (e-commerce). Both of these rather new terms describe computer related processes in which a user can order all sorts of products (such as books, videos, CDs and DVDs) or do his/her banking via a computer connected to the internet. This is a very efficient method of doing business, because it is not very complicated and saves an enormous amount of time, for both the customer and the merchant.

However problems have developed through this new way of enterprise. Most of the orders that are placed online are confirmed and paid using the customers credit card number and expiration date. This data can however be stolen, cracked and even generated by so called crackers (computer professionals using their knowledge and ability to harm others).

Of course the e-commerce industry developed more and more internet protocols, praising them as a secure way of transferring such delicate data, yet crackers always find a way around these boundaries.

Thus fraudulent orders are costing merchants billions of dollars each year, are a threat to their existence and scare potent customers off. Now fraud activity has not only become a problem for the consumer, but rather, for the whole industry of e-commerce.

â??Merchants who cannot control the flood of fraudulent purchase attempts will soon be out of business,â?? (Alvin Cameron) B- IT Background of the issue Over the last five years so called e-commerce companies and online-shops mushroomed in the world-wide-web. Users have the opportunity of searching through so called online-catalogs, adding items of interest to their virtual shopping cart. Once they have finished and are ready to log out, they are asked for their for their personal information including...



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