The big sites, like Amazon, have fewer problems because they have the financial and technical resources to set up sophisticated antifraud measures. Vause says smaller retailers face more risk. They need to become educated through their processor. Fraudulent transactions account for about 10 percent of Net retailers' total sales. For sites that sell digital goods like software, fraud accounts for nearly 30 percent of total sales.
Every sale potentially becomes a liability on the Net.
Right now, there's no technological widget to drop in a Web site to stop fraud. But security experts say designing Web sites that require several pieces of information about the card and the potential buyer helps a lot. Those items can then be run through screening software that looks for anomalies and red flags, generating a fraud risk score. By not authorizing purchases that score high, Web merchants can bring their fraud rates down below 1 percent.