E-commerce Security: Protecting Your Online Store from Fraud

E-commerce fraud will cost businesses $48 billion globally in 2025 (Juniper Research). That figure is projected to reach $107 billion by 2029 - a 123% increase in just five years. These aren’t abstract numbers affecting faceless corporations. They represent real losses hitting online stores of every size, from solo operators to established retailers.

What makes this worse is the multiplier effect. For every £1 lost to fraud, merchants typically lose £3.75 to £4.61 in total costs once you factor in chargeback fees, lost merchandise, staff time, and increased processing rates (Chargebacks911). A single fraudulent transaction can trigger consequences that ripple through your business for months.

This guide covers the fraud threats facing online stores, the security differences between major platforms, and practical steps to protect your business.

Why E-commerce Sites Are Prime Targets

Online stores hold exactly what fraudsters want: payment card data, customer information, and the ability to convert stolen credentials into goods or cash. Unlike a physical shop where a thief risks being identified, e-commerce fraud can be executed from anywhere in the world with minimal chance of prosecution.

The scale is staggering. 84% of e-commerce merchants experienced fraud attacks in the past 12 months (Industry Survey, 2024). 40% of global e-commerce fraud attacks originate in the United States alone (Cybersource). North America saw e-commerce fraud increase by 207% between Q1 2024 and Q1 2025 (Capital One Shopping).

Automation has changed the game entirely. Fraudsters no longer manually enter stolen card numbers one at a time. They deploy bots capable of testing thousands of cards per hour against checkout pages. A single attacker can probe hundreds of online stores simultaneously, looking for the weakest defences. If your security is weaker than your competitors’, you become the path of least resistance.

Common E-commerce Fraud Types

Card Testing Attacks

Card testing - sometimes called carding - is often the first sign that your store has been targeted. Fraudsters obtain batches of stolen card numbers from data breaches, phishing attacks, or dark web marketplaces. The problem is that many of these cards are expired, cancelled, or already flagged. To separate the usable cards from the worthless ones, attackers test them.

The testing process is straightforward. Bots submit small transactions - often under £1 - to verify that a card number is valid, the expiration date is correct, and the CVV matches. Cards that pass get used for larger purchases or sold to other criminals. Cards that fail get discarded.

For your business, the damage goes beyond any successful fraud. Every declined transaction incurs a processing fee. High volumes of declines raise red flags with your payment processor. Your chargeback ratio climbs. In severe cases, processors suspend merchant accounts entirely, leaving you unable to take payments at all.

Chargeback Fraud (Friendly Fraud)

Chargebacks were designed to protect consumers from unauthorised transactions. The system has been thoroughly exploited. Visa estimates that 75% of all chargebacks are now cases of friendly fraud - meaning the cardholder made a legitimate purchase and later disputed it to get their money back while keeping the product.

The numbers tell a troubling story. 79% of merchants reported first-party fraud in 2024, up from just 34% in 2023 (Visa Acceptance Solutions). Chargebacks cost merchants an estimated $117.47 billion in 2023 (Mastercard). The problem is growing faster than most businesses can adapt.

Part of the issue is consumer confusion. 72% of customers don’t understand the difference between a refund and a chargeback (Industry Research). 84% find filing a chargeback easier than contacting the merchant directly (Chargeflow). For many consumers, disputing a charge with their bank feels like a neutral action rather than an accusation of fraud against a business.

Account Takeover

Account takeover occurs when attackers gain access to legitimate customer accounts, typically using credentials stolen in previous data breaches. Once inside, they can make purchases using saved payment methods, change delivery addresses, and drain loyalty points or store credit.

This type of fraud accounts for 32% of all e-commerce fraud globally (Statista). The rise of credential stuffing - automated attempts to log in using lists of stolen username/password combinations - has made account takeover attacks faster and more scalable than ever.

Triangulation Fraud

Triangulation fraud is more elaborate. A fraudster sets up a fake storefront on a marketplace, often selling popular items at suspiciously low prices. When a legitimate customer places an order, the fraudster uses a stolen credit card to purchase the same item from a real retailer and ships it to the customer.

The customer receives their goods and has no idea anything is wrong. The real retailer fulfils the order normally. Months later, when the stolen card’s owner notices the charge and disputes it, the retailer absorbs the chargeback. This type accounts for approximately 26% of all e-commerce fraud (Statista).

Platform-Specific Security

Shopify: What’s Built In (And What’s Your Responsibility)

Shopify handles security well at the platform level. Every store automatically receives Level 1 PCI DSS compliance - the highest certification for payment card security. SSL/TLS encryption protects data in transit. The checkout environment is sandboxed, meaning third-party scripts can’t interfere with payment processing.

The March 2025 PCI DSS v4 deadline introduced new anti-skimming requirements that concerned many e-commerce operators. For Shopify merchants, this was a non-event. As Shopify’s engineering team noted, “PCI DSS v4 requirements will be integrated seamlessly in checkout, with no additional work required.”

So is Shopify safe? The platform itself, yes. The vulnerabilities lie elsewhere.

When data breaches have affected Shopify merchants, the platform’s own systems weren’t compromised. In 2020, two rogue support employees accessed transaction records from approximately 200 stores - an insider threat that Shopify addressed by terminating the employees and involving law enforcement. In 2024, a third-party app breach exposed data from roughly 180,000 users, but again, Shopify’s core infrastructure remained secure. The data leak came through a plugin developer’s unsecured database.

The pattern is consistent: Shopify’s platform security is strong. The risks come through third-party apps and extensions. Every app you install has some level of access to your store data. A poorly secured app becomes a backdoor regardless of how secure Shopify itself is.

Your responsibilities as a merchant:

Enable two-factor authentication on all admin accounts
Carefully vet third-party apps before installation
Review app permissions regularly
Monitor your store for unusual activity

The platform provides the foundation, but you build (or undermine) on top of it.

WooCommerce: Where Vulnerabilities Hide

WooCommerce is an open-source e-commerce plugin that transforms a standard WordPress website into a fully functional online store. It handles product listings, shopping carts, checkout, and payment processing. With over 4 million active installations, it’s the most popular e-commerce solution for self-hosted sites - meaning you control the hosting, the code, and the security rather than relying on a managed platform like Shopify.

That flexibility is both WooCommerce’s greatest strength and its primary security challenge. You can customise almost anything, integrate with almost any service, and aren’t locked into a single vendor’s ecosystem. But you’re also responsible for everything that can go wrong.

The plugin ecosystem that makes WooCommerce flexible also introduces risk. WPScan has documented 51 vulnerabilities in WooCommerce core itself, and the broader WordPress plugin landscape adds thousands more potential entry points (see our guide on WordPress security vulnerabilities for the full scope). The typical WooCommerce store runs 15-20 plugins. Each one represents a possible vulnerability if not properly maintained. A single outdated plugin can compromise an otherwise secure store.

Recent issues highlight the ongoing challenge. In 2023, the WooPayments plugin - used by over 700,000 stores - had a critical vulnerability that could allow attackers to impersonate administrators. WordPress pushed a forced security update to address it. In 2024 and 2025, vulnerabilities including SQL injection, cross-site scripting, and unauthenticated order creation affected various WooCommerce versions.

There’s also an active phishing campaign targeting WooCommerce merchants. Attackers send emails from domains like security-woocommerce.com or woocommerce-care.com, claiming a critical security patch is needed. The “patch” is malware. WooCommerce has confirmed these are fraudulent - legitimate security communications only come from official WooCommerce.com or Automattic.com addresses.

WooCommerce can be secured effectively, but it requires active management. Updates must be applied promptly. Plugins need regular auditing. Hosting security matters. Payment gateway integration must be handled correctly. The platform doesn’t manage these things for you the way Shopify does.

Not sure which platform suits your security requirements? That’s exactly what our consultations cover.

Preventing Card Testing Attacks

Card testing attacks follow predictable patterns, which makes them detectable and preventable if you know what to look for.

The warning signs include:

Sudden spikes in small-value transactions (often under £1)
Unusually high volumes of declined cards
Multiple transactions from the same IP address in quick succession
Activity concentrated during off-peak hours
Payment processor warnings about your decline rate
Unusual customer data patterns - fake-looking email addresses, nonsensical names, or mismatched billing and shipping information

Prevention requires multiple layers. No single measure stops determined attackers, but combining several makes your store an unattractive target.

Measure	What It Does
CAPTCHA on checkout	Blocks automated bot submissions
Rate limiting	Restricts transaction attempts per IP/session
Velocity rules	Flags unusual transaction patterns
Address Verification (AVS)	Matches billing address to card
CVV requirement	Ensures attacker has full card details
3D Secure	Adds bank verification layer
Minimum order value	Makes testing unprofitable
Device fingerprinting	Identifies returning bad actors

WooCommerce 9.6 introduced built-in rate limiting for the Store API checkout endpoint, though it’s disabled by default and requires manual configuration. Shopify offers Fraud Protect and built-in fraud analysis through Shopify Payments. Third-party tools like NoFraud, Signifyd, and FraudLabs Pro provide additional protection for either platform.

The goal isn’t to eliminate every fraudulent attempt - that’s impossible. The goal is to make your store harder to attack than the next one, so bots move on to easier targets.

Dealing with an active card testing attack right now? Don’t wait - get in touch.

The Chargeback Problem

Chargebacks hit harder than most merchants expect. The direct cost is obvious: you lose the transaction amount, pay a chargeback fee (typically £15-25), and often lose the product you already shipped. The indirect costs add up faster.

Staff time spent investigating disputes and gathering evidence. Higher processing rates if your chargeback ratio exceeds your processor’s threshold (usually around 1%). The risk of being placed on the MATCH list - a terminated merchant file that makes it extremely difficult to get a new payment processing account. For every £1 in chargebacks, total costs typically reach £3.75 to £4.61 (Chargebacks911).

Understanding why chargebacks happen helps with prevention. Some are genuine fraud - someone’s card was stolen and used on your store. Many are friendly fraud - the customer made the purchase, received the goods, and disputed anyway. Others result from merchant error - an unrecognisable billing descriptor, duplicate charges, or poor communication about subscriptions.

Prevention strategies target each cause. Clear billing descriptors ensure customers recognise charges on their statements. Order confirmation emails create a paper trail. Delivery tracking with signature confirmation proves the item arrived. Easy refund processes give customers an alternative to chargebacks - remember, 84% file chargebacks because it’s easier than contacting the merchant. Responsive customer service catches problems before they escalate to disputes.

For subscription businesses, transparency is critical. 22% of chargebacks relate to subscription disputes (Sift, 2024). Clear terms, easy cancellation, and reminder emails before renewals reduce these significantly.

Fighting chargebacks after the fact is possible but rarely successful. Merchants win only 8-18% of disputes they contest (Mastercard). Winning requires comprehensive evidence: delivery confirmation, IP logs matching the customer’s location, records of customer communication, proof the cardholder authenticated the transaction. The process is time-consuming and the odds aren’t good.

Prevention is always more cost-effective than fighting disputes after they happen. Chargebacks alone could fill a book - and for businesses dealing with high dispute volumes, the nuances matter. If you’re facing a specific chargeback situation, that’s a conversation worth having.

High chargeback ratio threatening your merchant account? Let’s talk strategy.

Case Study: When Fraud Nearly Killed a Business

An established e-commerce store selling digital products and merchandise began experiencing a pattern that started small and escalated quickly. A few chargebacks became dozens. Small transactions appeared and were declined. The payment processor issued warnings about the store’s chargeback ratio approaching dangerous levels.

The investigation revealed fundamental security gaps: no CAPTCHA or bot protection on checkout, no velocity limits on transactions, address verification not enforced, fraud scoring not implemented, and the payment gateway running on default settings - settings designed for convenience, not security.

Working with the store owner, Three Lions Technology implemented a multi-layered approach. Bot protection and CAPTCHA on the checkout process. Transaction velocity limits to stop rapid-fire card testing. Enhanced address verification matching. Fraud scoring rules that automatically held suspicious orders for review. IP-based blocking for high-risk regions. Two-factor authentication for all admin accounts. Ongoing security monitoring to catch issues early.

The results were immediate. Fraudulent transactions dropped by 95%. The chargeback ratio returned to acceptable levels within two months. The payment processor relationship was restored. The store now operates with continuous security monitoring rather than waiting for problems to surface.

The key lessons apply broadly. Default settings aren’t designed for security - they’re designed to minimise friction, which attackers exploit. Fraud prevention is dramatically cheaper than fraud cleanup. Regular monitoring catches issues before they become crises. Security isn’t a one-time project; it’s an ongoing practice.

Recognise any of these warning signs in your own store? A quick conversation can clarify your priorities. Get in touch.

Building Security In From the Start

Retrofitting security into an existing store is always more expensive and disruptive than building it in from the beginning. Technical debt accumulates. Staff learn workarounds that create new vulnerabilities. Customer data may already be exposed without your knowledge. Payment processor relationships are already strained by past incidents.

The real cost isn’t just the immediate fixes. It’s the momentum lost while you’re firefighting instead of growing. It’s the customer trust eroded by security incidents. It’s the premium you’ll pay for payment processing because of a problematic history.

A security-first approach means making different decisions from day one. Platform selection based on security requirements, not just features or price. Payment gateway vetting that considers fraud tools, not just transaction fees. Plugin and app audits before installation, not after a breach. Fraud prevention configured at launch, not bolted on after the first attack. Monitoring and alerting set up from the start, with clear escalation procedures.

For businesses building new stores or migrating from platforms that no longer fit, this is the opportunity to get the foundations right. For businesses inheriting stores with unknown security postures, a website security audit identifies what needs attention first.

Final Thoughts and Where to Go from Here

E-commerce security isn’t a single checklist you complete once. It’s an ongoing practice that evolves as threats change, platforms update, and your business grows. What works for a new Shopify store processing a few orders per day won’t suit a high-volume WooCommerce operation handling thousands of transactions.

The fundamentals remain constant: understand your platform’s security model, know where the vulnerabilities lie, implement layered protection against common attack types, and monitor continuously. Fraud prevention costs a fraction of fraud cleanup. Proactive security builds customer trust.

We’ve stopped card testing attacks mid-flight. Recovered stores from fraud that nearly killed them. Built new shops with security baked in from launch. The experience we bring isn’t from textbooks - it’s from working through the exact scenarios this guide describes.

Security audits to identify vulnerabilities before attackers do
Fraud prevention setup configured properly from the start
Honest platform guidance based on your specific requirements
Incident response when you’re under active attack
Ongoing monitoring to catch issues before they become crises
Chargeback strategy to protect processor relationships

Book a free consultation - a conversation about your business, not a sales pitch.

References:

Juniper Research (2024). “eCommerce Fraud to Exceed $107 Billion in 2029.”
Chargebacks911 (2024). “Chargeback Field Report.”
Visa Acceptance Solutions (2024). “First-Party Fraud Research.”
Mastercard (2023). “Global Chargeback Analysis.”
Capital One Shopping Research (2025). “eCommerce Fraud Statistics.”
Cybersource (2024). “Global Fraud Report.”
Statista (2024). “E-commerce Fraud by Type.”
Chargeflow (2025). “Chargeback Statistics and Trends.”
Sift (2024). “Q4 Digital Trust Index.”
WPScan (2025). “WooCommerce Vulnerability Database.”
Shopify (2025). “PCI DSS v4 Compliance Documentation.”