The present growth of e-commerce in India is marred by many challenges – security of online transactions being the biggest challenge. The problem for many of the e-commerce businesses are due to two reasons lack of proper infrastructure and poor customer awareness of the online frauds.
Many of the small business owners in India overlook the importance of the authentic software, mainly due to budget constraint. According to a survey (2011 Small Business Virtualisation Poll) by Symantec, though many small businesses are showing interest in online business, many of them are not taking even the basic steps to secure and protect their online business. It states that around 75 per cent of the respondents didnt have antivirus on their virtual servers and more than 50 per cent didnt have a firewall.
Many businesses use pirated software and they dont even update their anti-virus. The main risk associated with the pirated software and anti-virus is that there are no security upgrades available for them, which makes them more vulnerable to spy and Trojan attacks. This counterfeit software deployed by them has high chances of getting injected with malware, virus, bots, and loggers. It is risky to do online financial transactions on such computers as the bank and credit card info could be stolen while doing the online transactions.
When it comes to customers, very few are aware of the online frauds. A survey by Norton states that half of the Indian Internet users are unaware of the online security solutions available to them.
How businesses are overcoming these challenges?
Significant percentage of the business sectors in India are impaired by the above mentioned challenges. In spite of all these challenges, there are few sectors that have overcome (and are still overcoming) these challenges successfully and represent the solid and real growth of e-commerce in India. They are the banking and financial sectors.
Banks beefing up their cyber security
Banking and financial institutions in India have individually taken the charge to control online banking frauds to not only protect their interests, but also the customers interests. Any kind of phishing or malware attacks from either the customer’s side or the bank’s side will lead to the leakage of financial credentials and thus result in bogus transactions. Hence, many of the reputed banks in India such as State Bank of India (SBI), HDFC, ICICI, etc. are beefing up their cyber security by following best in the industry practices such as, implementation of 256-bit Secure Socket Layer (SSL) encryption, etc.
Banks spreading awareness on online transactions
Banks are also creating awareness among their customers about cyber security by sending SMS messages such as ‘don’t give passwords’, don’t perform transactions in cyber cafes’, ‘install authenticated software for computing’, etc. Some banks are also advertising in newspapers and magazines. Further, almost all banks including State Bank of India (SBI), Punjab National bank (PNB), Axis bank, have a prominent section on their home page designed for cyber security tips and suggestions.
The very recent announcement of Reserve Bank of India (RBI) to act against the banks that do not implement guidelines on electronic security of their transactions and operations by October 2012 stands as a testimony of their serious effort to ensure safe net banking.
Some online retailers use their employees to deliver the products and collect the payments on delivery, thereby, reducing both, online transaction and delivery risks. Sites such as Flipkart.com, Snapdeal.com, Jobang.com, etc. offer cash on delivery. This is encouraging people to make more transactions with online stores.
Visa verified by Visa password
Added protection is ensured for online shopping with many of the Indian banks offering the ‘Verified by Visa’ service. ‘Verified by Visa’ is a service which gives you an extra password that re-confirms your identity while making online transactions. Many banks including Indian Bank, State Bank of India, ICICI bank are offering Visa cards, which are automatically activated with this service. One can also activate his/her normal credit and debit cards for this service and have the facility of making safe online transactions at the ‘verified by Visa’ online stores. This simple to use service enables authorized payments and safe online shopping.
Even in case if someone is able to get hold of credit card details (typically when using the card at a physical store) they would not be able to know the verified by Visa username and password. This protects the credit card holder from unscrupulous persons stealing their credit card number, expiry date and code to make online purchases.
Overall, there has been significant innovation done by both e-commerce companies as well as financial institutions in India to encourage online purchases. Today, the people who are aware of online risks and have built the competence to deal with it are safely doing online transactions. The increase in the size of this kind of people is essential to sustain e-commerce growth in India.