APIs have long been an integral tool for retailers and e-tailers who use them to seamlessly tie multiple e-commerce related systems together. Database API calls deliver browsing or search results; inventory status via an API call is displayed with a click of a mouse; loading a digital shopping cart generates an API-based checkout routine, complete with credit card validation; and a purchase initiates an email and shipping confirmation via 3rd party APIs.
In the 2021 State of API Economy published by Google, the retail and hospitality industry ranked as the #1 consumer of APIs. No doubt that the pandemic related shutdown is a contributing factor to the volume of API calls observed, but the fact is retail organizations have embraced APIs and will continue to do so. The 2021 LexisNexis cost of retail fraud report showed that the digital and mobile usage patterns influenced by the adoption of [API driven] contactless payments and mobile apps have increased, even as merchants began welcoming physical customers. The flip side of increased usage is a matching uptick in security risks resulting in an expanded attack surface that potentially leads to data loss, fraud or business disruption by threat actors.
By the Numbers
Retail organizations generated 34% of 2.2T API calls in 2021. Source
True cost of addressing every 1$ in retail fraud, up from $3.13 prior to the pandemic. Source
Year-over-year increase in fraud related attacks against U.S.-based ecommerce retailers. Canadian e-commerce retailers saw a 52% increase. Source
Retail environments are lucrative targets for bad actors who target APIs directly, finding authentication coding errors that allow escalated privileges and using enumeration techniques to leverage it more broadly. Or they uncover APIs exposing sensitive data and then steal the payload, or they use automation to execute a shopping bot attack on a perfectly coded API. Attacks on your APIs can introduce a range of risks and they impact the entire business – not just the security team. Business impact examples include:
Whether it’s an automated shopping bot attack on a perfectly coded API, or a volumetric attack against an API coded without resource or rate limiting (OWASP API#4), the impact on infrastructure teams can cause costs to skyrocket. Worse yet, the web site and mobile app can become non-responsive, resulting in (real) user dissatisfaction.
Security is impacted by efforts to slow or stop API attacks, often struggling to separate real transactions from fake, or worse yet, blindsided by an unprotected shadow API.
Often engaged directly if the attacks are fake account or ATO related, investigating individual accounts, issuing account reset or delete recommendations. All of which consumes time that could (and should) be spent on broader team goals.
Marketing, Sales, eCommerce
Depending on the type of attack, these groups may be presented with inflated marketing statistics which turn into poor or misleading sales program decisions, missed revenue projections and damage to vendor relationships.
Customer Satisfaction, PR, Brand
With the understanding that 57% of consumers spend more on brands to which they are loyal, which can generate a 12%-18% incremental revenue growth per year, retailers are singularly focused on customer retention. A bad experience due to a slow or unavailable website, or desired item can drive them elsewhere, resulting in a 5x increase in costs of acquiring a new customer.
Limitations of Traditional Defenses
Today’s security teams simply lack the visibility and defense capabilities they need to protect the ever-growing risk from APIs and other application connections. Many believe that compliance with PCI or SOC 2 and a “shift-left, DevOps” approach is sufficient to protect their APIs. The problem with these strategies is that they don’t have a way to “know the unknown”, meaning they aren’t able to look for all APIs and API vulnerabilities without knowing where to look. Even if all APIs are discovered and “known”, attackers can still leverage seemingly legitimate transactions in an attempt to steal data, or commit fraud. Traditional approaches that use WAFs or API gateways depend on easily evadable detection, lack the real-time ability to discern good from bad API activity and are reliant on static, least common denominator protection spread across multiple technology components.
Savings achieved by blocking a high volume, API-based enumeration attack at Ulta Beauty.
Number of retail shopping accounts protected by Cequence during 1st half 2022.
The percentage of retail-based transactions observed during 1st half 2022 that are API-based.
The Journey to Unified API Protection for Retailers
Cequence Security believes in taking a holistic approach to defending against API-related data risk for retailers with a market-defining Unified API Protection solution that goes beyond API security approaches that focus solely on one aspect of the API protection journey. Cequence retail customers like Ulta Beauty are able to reduce costs by blocking bots that can negatively impact the business. In other cases, retail customers are using the UAP solution to maintain API contracts, to prevent shopping bots, or to stop pesky gift card fraud.
Ongoing API testing: Integrating API protection into development, which shifts API security left within the organization, so risky code doesn’t go live.
Unified API Protection is different from fragmented or incomplete API protection offerings because it’s a methodology designed to account for multiple types of risk, across every phase of the API protection lifecycle.
With the Cequence Unified API Protection solution, customers can continue to reap the competitive and business advantages of ubiquitous API connectivity. The Cequence solution results in attack futility, failure, and fatigue for even the most relentless of attackers. It significantly improves visibility and protection while reducing cost, minimizing fraud, business abuse, data losses and non-compliance.