The consequences of cyber-crime can be especially damaging for emerging e-commerce markets, where maintaining trust in the system is needed to underpin the growth of the industry. That's why an increasing number of banks, merchants, and payment service providers in China are investing in security and fraud management systems.
According to Barclays Capital, e-commerce in China grew by 66 percent from 2010 to 2011, and the growth will continue. But a growing e-commerce market also causes a sharp increase in cyber-crime. China will have to cooperate on a global level to tackle issues specific to its market that have global ramifications and global threats that have local implications.
Protection needs to be in place for everyone, starting with consumers, if China's e-commerce industry is to grow as it can and should. Partnerships such as the China eCommerce Task Force will be instrumental, as will be the individual solutions of each constituent. Payment service providers interested in joining the group should contact Visa.
The data flowing through merchants should be protected so that, if it is compromised it cannot be re-used to commit fraud. "Tokenization" and hosted payment acceptance services are two excellent ways to limit the data at risk and remove both merchants and consumers out of harm's way. Tokenization keeps payment card data on the payment network and replaces it with a surrogate value that is returned to the merchant, which can be used to initiate subsequent payments on the account. Hosted payment acceptance services allow merchants to handover the processing and storage of payment data to a more secure network, instead of their own.
Bringing the right tools together so that they use available data to assess the validity of transactions is essential. It's now possible for online merchants to compare individual orders with the tens of billions of transactions processed annually and conduct more than 250 tests to verify transactions. This can be done in no more than a couple of seconds across multiple payment types and from merchants around the globe, spanning online, call center, mobile and point-of-sale channels.
Today, eight of the top nine payment service providers in China are working with CyberSource to use this technology, offering online merchants, including Alipay and 99Bill, a safer and more trustworthy environment to merchants and consumers both.
Securing the e-commerce landscape in China is a shared responsibility, particularly in a system as complex as the payments industry. Cyber-crime must be stamped out through the right tools, partnership between private and public sectors, law enforcement and global initiatives to maintain consumer confidence and allow businesses here to continue to grow and prosper. Everyone has a role to play.
The author is country manager of Visa China.
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