Taking your business online? Here are six risk assessment questions you need to ask

By Bizclik Editor

By Brendon Williamson, General Manager of Business Development at PayGate

Launching an online business, or taking an existing business online, requires a new set of skills for anyone who is used to a more traditional bricks-and-mortar retail environment.

There are new ways to market, new ways to deliver your product – and new ways to ensure you don’t become the victim of thieves or fraudsters.

 

Here are the top six questions to ask:

1 Is my product physical or virtual? Delivering a physical object, a book, a camera or a piece of jewellery, carries different risks from delivering a virtual product like music, software or airtime. Only when you understand the risks properly will you be able to develop effective protection. When there’s a physical product to deliver, you have more time and opportunities to check that your buyers are who they say they are.

2 How easy is my product to resell? The easier it is to resell, the more tempting a target you will be. Electronic goods are among the most risky: They’re in great demand and their value is high, so they’re quick and lucrative for a fraudster to sell on before you ever discover they were bought with a stolen credit card. Things with lower value or more limited appeal are less vulnerable,it’s harder to sell on a book, a pot or an artwork.

3 How quickly is my product dispersed? Fraudsters are attracted to products that are delivered quickly. Airtime, for example, is delivered in seconds, can be easily sold and is in high demand. Someone who buys it with stolen money can afford to sell it below market value, which makes it even easier to get rid of. Gift vouchers suffer from similar vulnerabilities.

4 Is the product easily transferable? Is your product tied to a particular identity such as a name, an address, an ID number or a cellphone number? If not, as with the example of airtime above, it can easily be transferred from one person to another, and is another tempting target.

5 How well can you know your customer? If you add anonymity of the buyer to a product that is valuable, quickly delivered, transferrable and easy to sell, you have an almost irresistible target. Customers may not like having to register before they can buy on your site, but it’s an essential protection. You may also want to limit the number or value of transaction for a new customer, or create a waiting period. This is also means repeat customers can enjoy extra benefits.

6 How much risk are you willing to accept? You can’t eliminate risk, you can only manage. Once you have a good understanding of the risks your online business faces, you need to decide how much you are willing to accept.  Every protection you create will cost money, inconvenience your customers or possibly both, so you can’t just lock it all down: You will need to choose wisely to suit the needs of your own operation.

About PayGate - PayGate is an international payment gateway that simplifies payment and security for online retailers, which can be a very complex part of running a business. Delivering simple, effective online payment services to merchants of all sizes, PayGate has built up solid market leadership in South Africa.

Share

Featured Articles

Top 10 most innovative telecom operators in the Middle East

With Dubai-based Telecoms World Middle East in full swing, we chart the most innovative telcos from the region – and look at how they are transforming

Top 10 fastest-growing Indian companies in the UK

Business Chief takes a look at the top 10 fastest-growing Indian companies in the UK, according to the India Meets Britain Tracker from Grant Thornton

Top 10 workplaces prioritising people and planet in the UAE

Sustainable, flexible, collaborative, tech-driven, and amenities-rich, the office of the future considers both people and planet – here are 10 in the UAE

Top 10 female HR execs leading Saudi’s workplace transition

Leadership & Strategy

Top 10 largest asset managers by AUM operating in the UAE

Corporate Finance

Top 10 female CEOs leading Africa’s biggest businesses

Leadership & Strategy