Question

E-commerce

2. Credit card fraud is a wide-ranging term for theft and fraud committed using or involving a payment card, such as a credit card or debit card, as a fraudulent source of funds in a transaction.

a) Describe the management and business issues that have been created by credit card theft over the Internet.   

b) Propose TWO (2) measures can be taken to stop this illegal action.

Answer 1

a) The theft of credit card information to make transactions is a worldwide issue concerning data privacy and cyber security. It has and can potentially lead to business and management issues wherein the selling company has sold goods and received payment from funds originating via fraudulent means. It can also create major issues for the information security companies and companies involved in promotion of technologies in financial transactions as such events might lead to erosion of faith among consumers and lead to less usage of credit cards.Moreover due to ethical reasons and to prevent loss of reputation, many companies may be forced to return the payment received and cancel the transaction thus affecting revenues. So overall there are a great number of commercial, ethical and technological issues involved with theft of credit card data.

b) The way to safeguard credit card fraud is by:

1) Building a robust technology infrastructure wherein multiple authentication is required to conclude a transaction.

2) Quick response by service providers to nullify the card which has been compromised.

3) And user education to ensure best practices are followed which reduces chances of data theft and credit card fraud.