Whether customers pay online via an e-commerce website or in person with a digital card reader, you need to be confident your business’s payment systems are secure. This means implementing a range of security tools that protect data during transactions and afterwards.
Mobile payments and digital wallets like Apple Pay require authentication such as a fingerprint or passcode, giving thieves very little chance of intercepting customer data. This helps reduce unwarranted chargebacks that can cost your business.
Data encryption is one of the most important technologies used to secure online payments. It encrypts sensitive information like credit card details and customer data before sending it from the payment gateway to the acquiring bank. This drastically decreases the chances of cybercriminals stealing that information.
Various other security measures also help to ensure that customers’ sensitive information remains safe during an online transaction. These include 3D Secure, which requires that the customer authenticate their purchase with a password or code. It’s a simple way for merchants to provide their customers with an extra level of protection against fraud and data breaches. Other security measures include account validation, check verification, and PCI-scope management. All of these technologies make a business’s online payment processing more secure.
Tokenization is a method for protecting sensitive data by replacing it with something scrambled that can’t be deciphered without the original key. This helps to prevent fraud by removing valuable information from systems where it could be used to commit crimes like credit card theft or identity theft.
This reduces the risk of a data breach that exposes the personal information of your customers. But tokenization can’t prevent data breaches completely because hackers still need to access the system that holds the original sensitive information to make fraudulent transactions.
Tokenization also enables businesses to offer a more convenient experience for their customers, which can lead to increased conversions and lower cart abandonment rates. This is because they can simplify the checkout process by reducing the number of steps required to complete a purchase.
Network tokens replace a card’s 16-digit primary account number (PAN) with an equivalent value that’s unique to each transaction, yet stays secure within the payment network’s token vault. This allows businesses to remain PCI compliant without exposing PAN data to malicious actors.
With fewer opportunities to raise a red flag, tokens also boost approval rates by making it less likely that legitimate transactions get falsely declined due to outdated or compromised credentials on file. This significantly reduces churn and the cost of fraud prevention while increasing customer satisfaction.
Unlike proprietary tokens, which can only be processed by the PSP that created them, network tokens are interoperable across the payments ecosystem and recognized by card networks and issuers. As such, they provide a smoother checkout experience and enhance security throughout the lifecycle of a token.
The 3D Secure security protocol (or 3DS for short) is a system that protects card payments when used in conjunction with a merchant website and payment gateway. It was created by Visa and Mastercard to mitigate against online card fraud and other types of non-card not present (CNP) transactions.
During a 3DS transaction, the cardholder is either redirected to their bank’s website or their card issuer’s authentication page appears within their browser in a pop-up window or inline frame. This authenticates the cardholder during their purchase and makes it far more difficult for fraudulent transactions to go undetected.
The main benefit for businesses using 3D Secure is that it helps reduce the number of fraudulent transactions and provides a level of protection against friendly fraud (fraud committed by your own customers). Additionally, some card issuers offer liability shifts, meaning they take responsibility for chargebacks from eCommerce purchases made using this authentication process.
Ultimately, the best payment gateways will offer the fraud detection tools you need to deliver a fast, safe checkout experience for your customers. After a customer pays with a credit card, the information is transferred from the buyer’s bank to the merchant’s and then to the payment processor via an encrypted SSL channel.
Payment gateways keep this data safe by using encryption technology and adhering to PCI compliance, a checklist that all businesses that accept card payments must follow. Some also use tokenization to conceal sensitive financial identifiers as they move between customers, your business’s website, and the payment processor. This bolsters security and increases trust. Combined with the ability to handle recurring billing, this means that your customers will enjoy an easy, seamless online payment experience that will increase their loyalty.