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.
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 a secure and seamless purchasing experience. In their turn, payment providers, gateways, and credit card processors ensure security at a higher level.
Still, fraudsters hone their skills faster than the industry 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 security a primary concern for everyone involved in 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 processing security? We’ve handpicked several criteria to take into account and ask about.
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 to merchants, payment service providers, or other parties involved in card transactions processing aimed at protecting sensitive information and preventing fraud. The company has to pass the PCI DSS assessment annually. It will receive the compliance certificate upon successful completion.
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 safety is one of its central concerns. For example, it requires strong customer authentication (SCA) for all transactions in the EEA. It means payers have to pass multi-factor authentication, confirming the transaction with their passwords, devices, or biometrics (at least two of these options are a must).
The second is about customers’ data protection and privacy. It clarifies which types of data are considered sensitive, which policies should companies 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 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 need to 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 is to replace it 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. A customer who once made a purchase and had their card details tokenised can make further purchases in one click. For business, it positively affects conversion and eliminates the chance of declines due to errors in card data entry.
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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 and some third-party vendors develop a range of solutions for fraud prevention in response. They help to spot suspicious activity in a timely manner and save money. Today, many of such 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 security. 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 security tools 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, disable or enable 3DS and CVV check, and so on. Another solution to the conversion problem is manual transactions approval. A system will mark transactions as suspicious automatically, and your teammate will be able to go through them, assessing the risk manually.
Request a demo to see Corefy’s platform with your own eyes and learn how we ensure payment security and which tools against fraud are best for you.
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