Appreciating advancements in payment technology, we no longer have to worry about carrying cash. Only smart cards (debit/credit card) in our wallets and payment apps on our mobiles will do. With the continued evolution of technology in the area of digital payment, major transformation and further disruption can be expected in the years to come.
Today, every alternative payment option, be it debit/credit card or mobile wallet, has become a convenience and popular choice for users. However, with the ease of use of the technology comes certain risks such as data breaches and security threats. This implies the need to take extra precautions to protect financial and transactional data from potential theft.
Consumers are now spoiled for choice when it comes to payment gateways and while most offer the convenience of paying on the go with a myriad of benefits, the common denominator is security. Ensuring safe and secure transactions is paramount for organizations to succeed and gain consumer trust.
How can companies / businesses secure their payments?
With the advent of new technologies such as open banking APIs and blockchain, companies are also considering issuing their own cards to create their own financial ecosystem. This gives them the advantage of interacting with their customers and providing them with a seamless payment experience. However, it is also essential for businesses to install the necessary safety and security protocols to protect customer data and their transaction details. Here are some steps companies could take to ensure there is no breach in their system:
SSL-certified (Security Sockets Layer)
For any business transacting online, an SSL certificate is an absolute necessity. Installing SSL enables the protection of any kind of communication between the server and the client. It encrypts all data points such as logins, passwords, card numbers, etc. and creates a unique lock that helps businesses protect information from online hackers.
Address Verification Service (AVS)
AVS is an important tool that helps organizations detect suspicious transactions and helps prevent all types of card-related fraud. It helps to reconfirm the address provided by the card user with the address according to the bank‘s records. Once the merchant issues a ticket to verify the customer’s address, the issuing bank responds with authentication and helps the organization choose the next course of action i.e. accept or decline the transaction . While not absolutely foolproof, it does give businesses an extra layer of security for online transactions.
Payment Card Industry Data Security Standards (PCI DSS)
PCI DSS compliance for your business is one of the key steps organizations must take before accepting online payments. Launched in 2006, PCI DSS helps secure your online payments by providing a detailed framework of protocols and security measures that every business should undertake. Some of the key elements of the framework are creating firewalls, protecting cardholder data, encrypting data, creating unique identifiers, and more.
Tokenization and encryption
In the world of digital payments, tokenization and encryption play a crucial role when it comes to securing data. Although the two technologies are mentioned together, they are completely different in terms of operation. Tokenization, as the name suggests, converts important data points like an account number into random characters, i.e. tokens. These tokens have no meaning or value if hacked by hackers. Similarly, encryption uses cryptography to add an extra layer of security to keep the original data intact and inaccessible to anyone without the correct key.
Verification of customer transactions
Apart from using AVS, organizations must also use several other methods to verify customer transactions. Apart from the obvious verification via CVV number, companies should also invest in facial recognition technology, KYC verification, etc. Additional verification steps help businesses avoid online fraud and stay alert to suspicious activity from customers’ accounts. Several fintech platforms have also launched a video verification process, where the customer can shoot a quick video with their ID document to confirm their KYC.
Do not store customer payment data
It’s always good practice to keep an eye on the data connected to your system. One of the best methods of protecting customer data is to completely delete all payment data after the transaction is complete. Storing this sensitive information puts your customers at risk of being exploited by online fraudsters.
Technical training for employees
Provide detailed training sessions to the backend team handling all financial transactions and data management. Businesses generally ignore stupid human errors that could compromise customers’ financial and personal data. Conduct mock sessions on possible data breach scenarios that could occur during day-to-day operations that could impact and compromise security.
While you can never give 100% assurance against security threats, being vigilant and following simple practices can help mitigate risk. Having a dedicated digital payment method for online transactions, using biometric authentication where possible, not disclosing OTPs, ATM pins, etc. to others, etc can offer you reasonable security against potential payment fraud.
The opinions expressed above are those of the author.
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