The Potential Dangers of E-Business
E-business is one of the most promising business models that many entrepreneurs and companies have invested in. However, this has some serious economic risks that can adversely affect the business. These risks affect both the retailers and consumers. Despite these risks, many investors are still delving into this business platform with the aim of making more profits. Every business has its risks, but e-commerce tends to be the most adversely affected. When consumers make purchases from the online platforms as well as in-stores, they usually give out their personal and financial information to the retailers. They, therefore, entrust retailers with their data across the various online platforms. The safety of such confidential information is not guaranteed. This is because some of the online retailer websites use the information provided by the customers for financial theft, identity fraud and even damaging the reputation of rival companies.
Apart from the bleaching of confidential information, cyber attacks can occur which puts the retailers in a very difficult position of explaining to their customers. Additionally, when such attacks occur, the retailers or sellers are answerable to the regulators. About 78 percent raise concerns about data security and privacy every year. This has made the regulation of cyber security to heighten. In fact, the Trump Administration has recently passed a cyber-security regulation law to define the guidelines for data security in several companies clearly. More so the law is also aimed at clarifying the role of the federal government in the management of risks associated with cyber attacks.
Credit cards are the principal means of payment by consumers in most online markets. This has placed retailers at a very difficult place of ensuring that the security of the consumers’ credit card information is paramount. More so, these retailers are pressured by the credit card industry to ensure that cyber-security is strengthened because of the evolving cyber threats. E-business retailers have therefore organized training programs for all their employees to make sure that they understand all the parameters of protecting the consumers’ data. This is a very effective means of being prepared in case of a cyber attack and when regulators raise concerns regarding the privacy and security of the information provided by consumers.
Data breach has become a significant concern on the online market because when data is compromised, the economic impact that follows is catastrophic. For instance, approximately 350 change card data was compromised by ransomware in 2016. Such cases have been happening from time to time, and the impact on e-business has become worrying. Due to the rise of competitors in these online businesses, companies are coming up with numerous ways of attracting customers. They have thus developed thousands of applications that enable consumers to make their purchases easily and quickly. However, the increase in the number of apps has raised a major concern because they have become easy route fraudsters and hackers. Therefore, most of these apps have been found to be unsafe for use by consumers due to security issues.
As much as retailers get affected by the impact of cyber-crimes, consumers are also direct victims of these cyber attacks. This has created a tremendous economic concern in the online market as retailers are trying to develop their businesses and at the same time take the responsibility of safeguarding the information of their numerous customers.