Retailer's Guide to Fortifying E-commerce Security

The accelerated growth of Mexico’s e-commerce sector, projected to account for 22% of total retail sales in 2023, has not gone unnoticed by cybercriminals. They are capitalizing on unsuspecting consumers and exploiting vulnerabilities within businesses’ digital infrastructures and policies. Retail Dive breaks down the most common strategies employed by cybercriminals and provides insights on effective countermeasures — even amid the peak retail season.

The findings emphasize the top five prevalent fraudulent tactics: social engineering, payment fraud, credential stuffing, repeat returns and loyalty/reward program exploitation. Social engineering tactics reign, accounting for about 90% of all cyberattacks. Following this, one in three authentication attempts tied to credential stuffing proves to be malicious and fraudulent. Altogether, these exploits constitute a substantial loss for retails, about US$10.30 lost to fraud for every US$100 worth of returned merchandise. Lastly, loyalty and rewards accounts emerge as high-value assets, collectively valued at a staggering US$48 billion within the US alone.

In light of this rapid evolution, traditional approaches such as knowledge-based authentication and two-factor authentication (2FA) are insufficient to safeguard against these tactics. Instead, Retail Dive recommends that retailers implement multifaceted verification protocols during online transactions. This layered approach includes identifying purchases with IP addresses different from billing addresses, detecting instances of card testing and flagging the use of Virtual Private Networks (VPNs) for data spoofing. 

The meticulous assessment of potential vulnerabilities becomes particularly crucial during the holiday season, when retailers experience their highest sales, underscored Retail Dive. Buy Now Pay Later (BNPL) mechanisms, for example, contribute to a notable 30% - 40% surge in average cart values, effectively amplifying the average order value for the festive period.

"Mexico engages in a seven-week extravaganza stretching from El Buen Fin to the culminating Three Kings Day celebration in early January," says Jesús Juarez, Country Manager, Adjust. " This period resonates with fervent e-commerce activity, as evidenced by the remarkable US$198 billion online transactions recorded in 2021 — an impressive 27% surge compared to the preceding year.”

Consequently, Mexican retailers--and beyond--must implement strategies to shield themselves from continuously evolving tactics of fraudulent actors. This urgency arises from Mexico's exceptional position among countries where e-commerce significantly impacts overall retail sales, outpacing both the global average and established markets like France, Germany, Italy and Brazil.