This article demonstrates the basic security solutions used by payment providers to safeguard your customers’ payments and information.
As stated by Statista, the number of payment card fraud cases has increased drastically from 2012 to 2018. In 2020, the total number of fraud cases was at its highest peak - 2.83 million fraud cases. The main reason for such a substantial rise is the COVID-19, and lockdown, which ultimately made people turn to online shopping and led to a rise in cybercrimes.
Threats over cybersecurity have become a growing concern as more people turn to payments online and questions over cybersecurity have become even more critical for businesses. E-commerce sites and online retailers are facing an overwhelming workload of transactions, unusual activity, and fraud signals their fraud analysts are doing their best to keep up with today.
A report by MerchantSavvy Payment Fraud Statistics, Trends & Forecasts (2020) states that the companies with set fraud prevention programs have their expenses on fraud attack reduced by 42% and their remedy expenses by 17% compared to companies without these measures. Security innovations and solutions are created with customers in mind. It’s better to predict and prevent fraud than to handle the consequences, isn’t it?
There are basic security solutions to pay attention to when choosing a payment provider to minimize vulnerabilities and maintain a secure environment for processing your payments.
PCI DSS (The Payment Card Industry Data Security Standard) is a set of information security standards for organizations that work with branded credit cards from major card schemes such as Visa, Mastercard, JCB. Maintaining payment security is required for all entities that store, process or transmit cardholder data.
PCI-DSS is designed to keep the customers’ payment details safe and protect credit card data provided by the cardholders and transmitted through card processing transactions. PCI mandates the high-level requirements to stay PCI-compliant and safe. Non-compliance can lead to numerous fines from major payment systems like Mastercard and Visa and what’s more dangerous - makes your company vulnerable to threats and frauds.
Businesses must learn how to accurately address their compliance shortcomings. For example, a Verizon payment security report based on 10 years of investigation of PCI DSS compliance, states that they have never found a company that was fully PCI DSS compliant at the time it was breached.
SSL (Secure Sockets Layer)
(SSL) Secure Sockets Layer - the method idea is to guarantee the security and privacy of the credit card information is passed between your browser and computer by providing and establishing an encrypted or coded link between a web server and your browser.
If you take online card payments, you are required to have an SSL Certificate as part of your required PCI compliance. An SSL certificate is a digital certificate that authenticates a website’s identity and then encrypts information sent from the website to the server using SSL security technology. An SSL Certificate is a verification tool, that authenticates the company’s website identity and encrypts the transmitted data, so it presents a measure to create a secure connection between your customer and your website.
3D Secure V2
3D Secure V2 is a security protocol that provides an extra layer of protection for online credit and debit card purchases and ensures cardholder authentication and protection against fraudulent transactions.
The name comes from ‘Three Domain Secure’, which is a messaging protocol that involves three domains including, banks, technology (processed the transaction), and the issuing bank.
The system usually involved tokens or biometrics to authenticate cardholder’s information which decreases the number of fraudulent attempts. Moreover, the liability on every transaction that is successfully verified is shifted from a merchant to the issuing bank.
3DS2 prompts compliance with SCA regulations that stipulate two-factor authentication as a requirement for all electronic payments, enabling more effective prevention of fraud transactions.
Strong customer authentication (SCA) is a requirement of the EU Revised Directive on Payment Services (PSD2) on payment service providers within the European Economic Area. The requirement ensures that electronic payments are performed with multi-factor authentication, to increase the security of electronic payments.
Simply, SCA must consist of two from the following three requirements:
Something you have (biometrics/ fingerprints)
Something you own (your device)
Something you know (PIN code/password)
Moreover, to keep up with the changing market that promotes CNP-transactions 3DS2 makes the experience more secure and user-friendly. First, 3DS2 facilitates the data exchange between merchants, cardholders, and issuers to achieve more accurate authentication. Therefore, CNP fraud can be easily prevented.
Second, another benefit of using 3DS2 is its “frictionless flow” as merchants can use customer’s issuing bank information instead of the customers’, so customers do not need to remember a PIN or get redirected to a new webpage. Of course, it also contributes to a shortened and convenient authentication process.
In this article, we analyzed the standard payment protection measures that each payment provider should follow to offer a secure and reliable payment experience for their customers.