It is widely accepted in the business community that for small to
medium-sized enterprises (SMEs) to prosper in the future they will
need to be able to do business online.
The problem lies not in convincing SMEs that going online is the
way ahead, but - with the plethora of online security breaches that
continue to hit the headlines - in convincing SMEs that such
transactions are secure.
The British Chambers of Commerce (BCC) has issued a manifesto on
e-business, part of which recommends that the government should
facilitate moves by SMEs into the e-business arena. It believes
that it is not fear of technology that prevents SMEs from going
online, but rather the question of who carries the can when things
go wrong.
Neil Barrett, technical director of security company IRM, believes
the emphasis placed by banking organisations on technology is
clouding the real issue: how much trust can a business have in the
security systems implemented?
He said: "They've got to realise that confidence in e-business is
not necessarily a technical issue. It's not a case of whether the
bank has an impressive encryption system or firewall, but whether
the customer trusts the system the bank has put in place."
Barrett added that it was not the fear of a system breach or
failure that concerns the SME, but rather who suffers the
consequences of such an occurrence.
"The biggest thing that banks can do - which applies to trading
with SMEs as well as private individuals - is offer to underwrite
the cost aspect of any fraud attack, so that any worry the SME may
have of being hit by a huge bill is removed," he said.
Another way banks could support SMEs more effectively is by giving
them the option to pay for banking support for e-business credit
card payment processing through a percentage of each transaction
rather than a flat fee, Barrett said. This view is echoed by the
finance director of a leading online computer hardware and
peripherals vendor, who said: "If banks charge a flat fee, you get
a skewed weight of processing cost set against the smaller-value
transactions, thus penalising companies that want to sell only
low-value items such as books."
The UK has long been dubbed the worst country for credit card
fraud, but Barrett believes this is not because a greater
proportion of fraudulent activity takes place in this country, but
because the UK has better mechanisms for detecting such
fraud.
"The figures are more to do with reporting fraudulent credit card
transactions, as attacks are more likely to be reported here and
investigated, rather than simply being taken as read that they are
indeed fraudulent."
Another problem facing companies trading online is the lack of a
cost-effective delivery confirmation service that would prevent
false claims for goods not received.
Barrett said: "The only way available at the moment is assured
delivery, where you sign for goods upon receipt, but this is a
costly method. Mail order companies such as Freemans and Grattan
have had their own types of assured delivery for many years, and
SMEs can take pointers from them as to how they operate
cost-effectively."
So are the government and the financial institutions succeeding in
the struggle to convince SMEs to go online? Barrett believes they
are.
"I think the battle to win over the confidence of SMEs in online
security is being won as we are seeing a steady growth of SMEs
entering the market. You could point to the strides made by banks
in gaining confidence and providing assurance, but there is the
more pragmatic point when looking at this of can they afford not to
go online, as the cost-benefit and ease of delivery channels the
Net provides are there for all to see."
How safe do you feel conducting business online?
We
want to know
your opinion. Do you have faith in the security
of your bank's online systems? Would you prefer to pay your bank a
percentage of the value of each transaction carried out on your
site or a flat fee to cover all transactions?
E-mail CW360.com and tell us what you think >>