Online shopping in South Africa is expanding in terms of offerings such as event tickets, travel tickets, hotel reservations, and DVDs, books, music, and videos.<\/p>\n
However, the latest Effective Measure E-Commerce Industry Report indicates that fewer consumers are transacting online than in the previous year.<\/p>\n
In the 2017 survey, 46% of respondents have purchased something over the internet, compared to 56% of respondents in 2016. This year\u2019s percentage still paints a positive picture of the local eCommerce landscape, which is expected to grow to over R53 billion by 2018.<\/p>\n
But the statistics reflect one truth: most customers still prefer a trip to a brick-and-mortar store to get their spending on.<\/p>\n
This then begs the question, what is preventing the remaining 54% of shoppers from using their credit card on an eCommerce website?<\/p>\n
The Effective Measure report has the answer to this: there is a growing mistrust on the part of consumers in brands and their payment methods.<\/p>\n
Given the frequency of data breaches, it should come as no surprise that consumers see online payments as a primary concern.<\/p>\n
While there is a case to be made for the safety of offline payments (consumer\u2019s credit card data is not saved anywhere), the tables have turned in recent years.<\/p>\n
Criminals have figured out new techniques to access sensitive data at physical locations, such as using skimming devices that capture credit card information when a card is swiped.<\/p>\n
Recently, major international retailers, Target, Neiman Marcus and Home Depot fell victim to data breaches.<\/p>\n
It was reported that online customers were not affected. This has led to many security experts concluding that entering one\u2019s credit card information at a card terminal at a brick-and-mortar store is risky.<\/p>\n
When a credit card transaction takes place at a physical store, the retailer saves the card\u2019s data on a computer which is connected to the payment terminal.<\/p>\n
The customer\u2019s credit card details are transferred to the merchant\u2019s bank and the customer\u2019s issuing bank for clearance.<\/p>\n
If the details are validated, authorisation is sent back to the payment terminal.<\/p>\n
These systems inherently run on outdated software and, with this much information floating back and forth, there will be a risk of the processing chain being hacked.<\/p>\n
The weakness of traditional card payment systems is that the technology, developed in the 70s, is not updated very often.<\/p>\n
Online payment systems, however, were invented in the digital era, and are thus far more cutting-edge as far as security is concerned.<\/p>\n