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. Last Updated: 07/27/2016

RuNet E-Commerce Secure as Any

Terrified to punch in a credit card number on the RuNet?

Experts say e-commerce customers aren’t any more likely to get burned shopping at a known domestic retailer than at the Internet’s top shops. Chances are that a local online retailer uses the same level of security software as the biggest dot.coms for processing financial transactions.

"From a technical perspective, Russian shops are as secure as Amazon.com," said Andrei Braginsky, telecoms analyst at Renaissance Capital brokerage house.

Technical security won’t help, though, if the retailer itself is a fraud. In May, a phony Internet shop swindled some $630,000 from 5,500 unsuspecting cardholders through Cyberplat, a third-party payment processor. (See story.)

Customers still have to rely on their intuition to sniff out reputable sites. "It’s really a common sense approach, but expats especially might not know who’s who in the market," said Ron Lewin, managing director at IT consultancy TerraLink.

Internet traffic is very easy to track, Lewin said. So retailers use a secure connection feature — usually indicated by a key or lock symbol — to encrypt information sent to their sites.

"This encryption is good enough to stop almost everybody from getting the data," Lewin said. "However, it is important to note that Internet e-mail is usually not encrypted whatsoever. People should never send credit card information via e-mail."

E-shops interviewed said using a well-known financial processor also helps to reassure potential credit card customers.

The payment services also minimize the set-up costs and financial risks of handling customer purchases. Without a third-party processor, the retailer must establish a direct relationship with the credit card companies, install the proper software to accept card information and make bank transfers. And while credit card companies will often cover cardholders’ losses due to fraud, "the businesses have to eat [the losses]," Lewin said.

"We’re close to happy with [Cyberplat]," said Kirill Modelevsky, director of online supermarket XXL of its Internet payment service.

He cited complaints that the service is not always quick and that customers worry it is not secure.

Cyberplat and Assist, another web payment system, have a combination of in-house and purchased software to implement high-security features such as storing sensitive information in 128-bit encrypted form, transferring data by SSL 3.0 protocol and antiviral software.

"We warn our Internet merchants that some transactions can be fraudulent. We are using special methods to reduce fraud," said Andrei Mamykin, product manager of the St. Petersburg-based Reksoft firm, which developed Assist to process credit card payments for its online book and video retailer Ozon.

Cyberplat’s Spiridonov said that since the scheme by Politshop — the fake shop that transferred its payments through Cyberplat — they have cooperated more closely with the Interior Ministry’s high-tech crime division.

"Now I can proudly tell you there has not been one successful attempt to hack our server," he said.

Some companies skip the online payment process all together, saying that offering that feature, and thus spending dearly on security features, would not significantly boost profits since credit card use is low and online credit card use is even lower.

Seventy percent to 80 percent of Assist’s card transactions come from abroad. But many retailers, such as those selling perishable items, do not have the luxury of finding their customers across the border.

"There are so few true credit cards in Russia that the inability to make payments online is not really the obstacle," said Jonathan Hay of online supermarket Bistronom.ru, which accepts only face-to-face credit card payments, usually made to the courier delivering groceries.

"The obstacle to faster growth in the [business-to-consumer] market is a lack of credit cards," Hay said. "We recognize that it would be more convenient to pay online, but we want to be sure that the system is as near to 100 percent safe as possible for our customers."

XXL’s Modelevsky agreed. "In Russia, plastic money is not so popular," he said. "Not so many people have credit cards. That is why [securing a two-party payment system] is not such an important question for us."

Only about 5 percent of XXL’s customers purchase online with credit cards. "If our customers ask more and more for online service with credit cards, we would do this immediately," Modelevsky said. "Now it’s not so necessary."

Credit card companies have introduced rules to minimize a hacker’s chance of using the stolen information, such as only approving transactions when the goods are shipped to the credit-card holder’s billing address.

"Growth depends heavily on a convenient, secure and reliable method of payment online, as convenience is the main benefit of the Internet," Lewin said. "In all cases, the consumer must feel confident in the security or reliability of the transaction.

"But even cash cannot provide total security."



http://www.xxl.ru XXL

http://www.ozon.ru Ozon

http://www.bistronom.ru Bistronom.ru

http://www.terralink.ru Terralink