Secure payment processing is when the data and money of all parties involved in the transaction processing are protected based on specific standards, regulations, and measures.
Payment processing security is the foundation for trust, and trust is one of the fundamental pillars of e-commerce. Customers entrust merchants with their payment details, and merchants are responsible for providing secure payment processing and a seamless checkout experience. In their turn, payment providers, payment gateways, and credit card payment processors ensure security at a higher level.
Still, fraudsters hone their skills faster than payment systems can respond to threats. In fact, global losses from payment fraud have tripled in the last ten years, reaching $32.39 billion in 2020. This number highlights the scale and the importance of the issue, making payment processing security a primary concern for everyone involved in handling orders and payments. According to Cybersource, 36% of e-commerce specialists said maintaining security and managing fraud is their biggest payment management challenge.
How to know if a payment service provider took care of card payment processing security? We’ve handpicked several criteria to consider and ask about to ensure you're getting secure payment services.
In terms of compliance, the essential indicator of online payment processing security is the availability of a PCI DSS certificate. PCI DSS is a set of card payments security standards and requirements for merchants, payment service providers, or other parties involved in card transaction processing aimed at protecting sensitive payment information and preventing fraud. The company has to pass the PCI DSS assessment annually. It will receive the PCI DSS compliance certificate upon successful completion.
Besides PCI compliance, merchants that provide services to customers from Europe also have to comply with local regulations like PSD2 and GDPR.
The first regulates payment services in the European Union, and secure payment processing is one of its central concerns. For example, it requires strong customer authentication (SCA) for all transactions in the EEA. It means payers must pass multi-factor authentication, confirming the transaction with their passwords, devices, or biometrics (at least two of these options are necessary). Aside from ensuring secure checkout, this measure makes the checkout process more convenient and faster.
The second is about customer data protection and privacy. It clarifies the types of sensitive data, which policies companies should implement to collect, store, remove and protect the information properly, and so on. It also implies fines for breaking the regulation.
One of the PCI requirements is SSL, or secure socket layer. This technology encrypts all the sensitive payment information transferred between the customers’ browsers, your website, servers, etc. The encrypted data can be decrypted only by those having the private key. For thieves trying to capture customers’ payment details, it is impossible to break the cypher.
To get an SSL certificate for your website, you must confirm your identity and the website ownership to the issuer. Then, your customers know you took care of it thanks to a green padlock and HTTPS prefix in the address bar.
Another advanced way to protect credit card details and other sensitive information as you process payments is to replace them with a token, a unique digital identifier. This token by itself doesn’t have any value or any data encrypted in it. The only way to access the original data securely stored in a different location is to exchange a token for it using the tokenisation solution that issued the token.
Tokenisation is beneficial for all parties in the online payment process. Customers who once made a purchase and had their card details tokenised can make further purchases in one click. For businesses, it positively affects conversion and eliminates the chance of declines due to errors in card data entry.
3D Secure is a security protocol that helps to ensure that the person initiating a card payment is a cardholder. It works as follows:
As thieves and fraudsters sophisticate their schemes, payment service providers, payment gateways and some third-party vendors develop various solutions for fraud prevention in response. They help to spot suspicious activity in a timely manner and save money. Today, many such secure payment processing solutions use machine learning and artificial intelligence and can self-learn based on your card payment traffic.
It’s crucial for a business to reach the balance between conversion rates and secure payment processing. Some of the measures listed above are proven to affect conversions negatively. It doesn’t mean you should neglect them, but it’s worth taking an individual approach and fine-tuning secure payment processing solutions in a way that suits your business.
For this, look for a payment partner that allows customising security settings and filters based on geography, transaction amounts, card types, disabling or enabling 3DS and CVV check, and so on. Another solution to the conversion problem is manual transaction approval. A system will mark transactions as suspicious automatically, and your teammate can go through them, assessing the risk manually.
Request a demo to see Corefy’s platform with your own eyes and learn how we ensure customer information and payment security and which tools against fraud are best for you.