At the end of this module you will be able to:

• Know what to look out for when performing online transactions
• Learn how to strengthen the security of our sites
• Understand the core advantages of online transactions
• Recognise the main disadvantages of online transactions

Online transactions are on the rise. They have increasingly become part of our lives, to the point that, nowadays, anything we imagine can be bought online. 

Despite doing on average several transactions a week, average users might not know vital information on how to safeguard their security when buying or selling online and stay away from all kinds of cyberthreats such as identity fraud, theft, or malware.

But not all is lost, there still are measures users can take to avoid these hazards and keep their valuable information safe:

Every internet user receives spam, i.e., unsolicited, repetitive messages sent via text, email, or on any digital channel. A great number have commercial purposes, such as promotions, targeted offers, or the launch of new products or services. 

Although most of them are nothing more than annoyances to delete on sight, some include harmful links that lead to sites that mimic the actual ones, for example, your bank or your favourite online store.

To avoid that, we must be careful when clicking links, especially those coming from unverified sources, and make sure all start by httpS://. Also represented by a padlock in the address bar, this “S” stands for “secure” and means that the site is authentic.

But it does not end here, the site must be legit, but the offers there might be just too good to be true (i.e., the best TV in the market for only €100), not have real user comments, a total lack of quality pictures or coherent content.

These are signs of a fraudulent site at which not to carry out any transactions.

Ensuring buyer cards are valid is crucial when selling online, whether on an online marketplace or your own site. Fraudulent transactions are lost transactions. 

This is not only due to the obvious fraud risk but also to the fact that too many fraudulent transactions and chargeback requests will result in Visa, Mastercard or American Express placing your site on high-risk lists or simply not allowing your business to accept transactions with their cards.

Additionally, supposing we were using a verified, trustworthy site, some measures concerning sensitive information are still needed:

• Passwords: They should be longer than 8 characters and include as many capital letters, symbols, and numbers as possible.

• Card details: Even after having confirmed that the website is genuine, do not save your bank details on the page or in the browser (both will likely ask you to). In this way, a person with your password will not have access to your bank details.

• Temporary and Virtual cards: Offered by certain banks, they consist respectively of a one-time number and a random card number generator.

On the other hand, when selling items online on our own site, some settings can greatly improve its security potential:

• Make sure our web server has security protocols like SSL and TLS implemented. They will encrypt sensitive data and it is indeed necessary for most payment systems.

• Our website should only keep essential data like delivery address (and not card details).

• Data kept on the server should be tokenised and encrypted, which means it is not retrievable and, if forgotten, can be only reset with user credentials. 

Online transactions bring many advantages for both customers and sellers, such as:

1. It allows instant, 24/7, verifiable payments. This has a double effect: customers aren’t required to send proof of payment while also easing sales tracking. 

2. In the case of cards and digital wallets, they also easily support recurring payments and refunds.

3. It expands the business’ reach to a worldwide scale both for transactions and promotion, which can be also tailored after analysing customer behaviour.

4. Online payment also improves distribution channels, since it enables affiliate links, which can be either posted on other websites or promoted by influencers.

5. Another aspect is that, due to its immediateness, online transactions are attractive to impulse buyers, who can be convinced on the spot, anywhere, at any time.

6. Moreover, it lowers the transaction cost since it eliminates the need to employ a cashier, without having to cash cheques, deal with counterfeit banknotes or process payment slips.

However, despite its advantages, not all aspects of online transactions are beneficial:

1. Technical problems and maintenance, even when occasional, tend to involve downtime, which means both sales and purchases stop. 

2. As stated before, fraudulent transactions entail not only inherent risks but also potential problems with transaction providers.

3. A frequently overlooked form of fraud is “friendly fraud”, i.e., valid transactions that are later disputed by customers either because of dissatisfaction, purchase errors or hopes of getting a refund on top of keeping the item or service.

• Security is not something only customers should be aware of but also implemented by sellers
• Customers’ common sense is as useful as technical measures to avoid online fraud
• Online transactions have availability, logistics and customer profiling advantages
• Despite its advantages, online transactions entail some issues for both buyers and sellers