A successful and sustainable ecommerce operation requires a lot of moving parts to work flawlessly in tandem. Merchants have to protect customer card information, prevent fraud (which is complicated by the fact that ecommerce purchases are by definition "card not present" transactions) and, in many instances, support multiple currencies and handle cross-border payments. What obstacles must they overcome in order to fulfill all of these requirements?
Understanding the risks and challenges of ecommerce payments
The challenges inherent in ecommerce are multifaceted, and they are becoming more formidable with time:
- Fraud-related costs increased 38 percent between 2013 and 2014, rising to around $32 billion a year, as per a LexisNexis study that cited rising retail volume and mobile payments as two of the primary causes of this spike.
- In the U.S., the ecommerce fraud rate was just a hair below 1 percent of transactions as of early 2015, according to CyberSource Corp., but it is projected to rise in the coming years in the wake of the shift from magnetic stripe to chip-and-PIN cards.
- Indeed, "card not present" costs jumped over 33 percent from 2011 to 2013 and could eventually reach $6.4 billion by 2018, or three times the 2011 figure, due in part to cybercriminals increasingly targeting ecommerce platforms now that physical points of sale are becoming more secure.
- Many merchants still wrangle with manual data entry processes, which significantly increase the chances of human error while also slowing down their order-to-cash (OTC) processes and putting customer payment data at risk.
- Ecommerce may be a company's only channel, or part of its multichannel strategy; either way, OTC can be a major struggle, with it eating up as much as 30 percent of an accounting department's operating costs and up to 25 percent of a B2B company's revenue.
Across the board, ecommerce success requires a well-honed strategy as well as dependable technical infrastructure. Fortunately, there is a solution that hits both of these marks and also directly addresses the above set of seemingly daunting fraud and OTC issues.
What can be gained through ecommerce and SAP integration
Many enterprises and small and medium-sized organizations already use SAP systems to handle customer relations and business operations. Whether a firm uses SAP for its PoS terminals, its online stores or its accounts receivable systems, the SAP solution in question can be integrated with a payment application such as Delego's Payment for SAP for enhanced fraud prevention and substantial cost savings.
"Many organizations already use SAP."
Integrated SAP tools help solve many of the problems that still beset ecommerce operations, including:
1) Secure integrations
Online payment fraud will only become a bigger concern for ecommerce merchants in the near term. In addition to "card not present" transactions, businesses will need a plan for handling "card present" ones, too, and keeping them safe from fraudsters.
Communications with a payments processor should be simple to establish, so that the merchant can safely authorize and settle online transactions. SAP ecommerce integrations provide the security and convenience that businesses now need to stay ahead of the fraud threat. Cardholder information is more effectively protected across multiple payment platforms with SAP and Delego.
2) Need for centralization and digitization of data
With the proper payment application integrated, an SAP system can be turned into a hub for all of your payments. This setup helps to accelerate the reconciliation of orders, which in turn ultimately speeds up OTC and saves tons of time and money.
Manual processes simply do not scale when thousands of orders are passing through the system all at once. The centralization and automation provided by an ecommerce SAP solution also help to get orders to suppliers more quickly and, as a result, keep partners and customers as happy as possible.
3) Minimization of human error and reduction of data entry
Paper forms, spreadsheets and sticky notes all have their uses, but they are less than ideal for running an ecommerce platform. There is too much risk of an error during data entry, along with obvious problems such as delays in distributing and mailing paper documents.
Having SAP integrated directly with a payment application allows ecommerce merchants to steer clear of these particular risks. Tasks such as authorizing, settling and reconciling transactions become a breeze as a result.
Moving toward better security for customer data
Turning SAP into a one-stop shop for payments goes a long way in reducing ecommerce fraud. It:
- Provides secure integrations that connect ecommerce systems to payments processors, offering enhanced protection from fraud.
- Centralizes processes such as order fulfillment and OTC.
- Reduces overall reliance on manual tasks that are both error-prone and costly to recover from.
Merchants have to be prepared to confront ecommerce fraud head-on, especially as fraud schemes increasingly target websites instead of PoS locations. SAP ecommerce helps toward that end while also bringing many other cost-saving benefits to the table too.