How Secure is Payment Processing?

From our weekly food shop to Christmas and birthday presents, online shopping has become a huge part of our lives. One in three items of clothing, household appliances and furniture purchased in Britain are now bought online, a figure that’s set to rise. However, one thing still puts some shoppers off e-retail: security.

Nowadays we find ourselves giving our personal information away to thousands of companies for a multitude of reasons, but understandably we worry about criminals getting their mitts on our financial information the most. It’s a concern for businesses too – how can you be sure you’re not receiving fraudulent payments? You’ll be pleased to know that, despite the possible risks, payment processing is incredibly secure. If you need a little more reassurance than that, here are the details:

How secure is online payment processing?

The payment processing industry is highly regulated, as it deals with transferring people’s private financial data from one company to another. It’s not just about protecting the customer either, the issuing banks, merchants and processors all need to be protected from identity theft and fraud. Essentially, security is in the best interest of everyone.
A payment gateway is a company which is authorised to process transactions, which makes the purchase of products possible, and it must adhere to Payment Card Industry Data Security Standards (PCI DSS). All payment service providers must comply with these standards. Moreover, all data which passes through payment gateways is encrypted, which ensures it is not easy for hackers to get hold of people’s financial details.

Why is security important?

Apart from the obvious legal and financial reasons, security is vital if you want to turn visitors into buyers. As we mentioned earlier, some consumers are still wary of online shopping for security reasons. If you can reassure them that your website and the purchasing process is safe, then they are more likely to buy and give you their details.
Secure sockets layer (SSL) is an encrypted link which is used to transfer sensitive information. Savvy shoppers know which websites have this by looking out for the lock icon or green address bar. A web address that starts with ‘https’ is also more secure than a ‘http’ one. These simple indicators tell a user that the site is safe to buy from.

What merchants should look for?

When choosing a payment processor, there are a number of things merchants should look out for if they want to ensure their customers’ details will be kept safe. First of all, they must be PCI DSS compliant, as compliance equals security. Hackers and criminals are constantly changing their tactics and using new technology in order to steal people’s information, so it’s vital to stay on top of what they’re doing.

Some sophisticated payment processors use identification technology to decrypt the source of fraudulent parties attempting to make a transaction, even if they’re trying to hide their identity and location. This means the processor will have access to information on which devices are, and have been, used for fraud. All this data can be used to help keep you and your customers’ information safe.

Others will utilise a fraud network to monitor connections between merchants, issuing banks, customers and credit card associations. Again, this makes it easier to identify which transactions are fraudulent and must be stopped.

Another to look out for is if the processor provides Address Verification Services (AVS) and Card ID Verification (CVC), including CVC2 for MasterCard, CVV2 for Visa and CID for American Express. When used, they become a key part of the order screening process, so you can keep an eye on transactions in real time and identify when card-not-present (CNP) fraud has taken place, enabling quick action.

Essentially, AVS catches out fraudsters by checking the billing address given with the one present on the cardholder’s credit card statement, and CVC verifies the security code on the back of the card. Since this code is not included on receipts, this will tell the merchant whether the customer actually has the card in their hands or not. If the code or billing address is wrong, they may be a fraudster.

The information from these checks is sent to you so you can decide what to do next, whether that is to refund the transaction, delay the delivery of the product they’ve purchased or investigate the cardholder in question further. You have complete control.

Hackers and fraudsters are a constant threat to all businesses, but as long as you do your research and pick a secure payment processing service, you can be sure your data will be looked
after. Don’t forget that it’s not all down to the gateway though, it is just as much your (and your customer’s) responsibility to make sure sensitive data is kept secure.


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