Best practices that should be deployed by eCommerce and online businesses to secure online payments processing.
Transactions and eCommerce payments should take place securely, smoothly, and conveniently. Fraudsters and cybercriminals are constantly exploring loopholes in systems and finding ways to steal data and money. Therefore, gateways must put in place best practices to secure online payments processing. Best practices should cut across all alternative payment methods and offer the customer an intuitive checkout user experience.
Principles of Secure Payment Processing
There are three principles that guide security practices for transaction processors. These include fraud management, security, and compliance. High volume of fraud cases could result in payment processing companies revoking the rights of merchants in processing transactions.
The reputation of the business could be also subjected to negative implications due to fraud.
Furthermore, a gateway should implement security standards for weeding out security vulnerabilities and ensuring personal data and cash are secure. The final principle is compliance. Regulatory bodies set out privacy and data security standards to prevent businesses from falling prey to lowly payment processors.
1.Payment Card Industry Compliance
Payment Card Industry (PCI) compliance is aligned by standards that guide storage, processing, and transfer of credit/debit card data. Businesses are subjected to high fines and penalties in the event of a data breach if they are non-compliant with PCI standards. All businesses dealing with payments should play an active role in managing compliance despite payment processors remaining proactive in PCI compliance.
The standards and practices of PCI compliance are detailed in a paper known as the Payment Card Industry Data Security Standard (PCI DSS). The guidelines one company follows differ from what another company will follow depending on the size of a company. For example, there are 4 classifications under which the PCI will assign a business. In level 1, the business handles over 6 million transactions annually. Level 2 businesses handle between 1 -6 million annual transactions while level 3 businesses support a transaction volume of 20,000 - 1 million annually. The final level, level 4 handles less than 20,000 transactions a year.
2.Data Encryption on Payment Gateway
Transport Layer Security and Secure Sockets Layer are authentication protocols for protecting data against illicit actors. Payment processors should secure data transactions with SSL and TSL protocols to ensure the safe dissemination of data and that only the intended recipient has access to sensitive information. Data encryption protocols are implemented across businesses that use their websites to sell products.
Payment processors should flag down potentially fraudulent transactions by double-checking IP addresses against the billing address. Different IP and billing addresses pose a red flag for suspicious activities. Businesses could implement the services of an Address Verification Service (AVS) company to guarantee customer assurance.
4.Strong Password and 2-factor Authentication
Fraudsters may penetrate into payment accounts through brute force and make away with customer money. Most cybercriminals will guess passwords a variety of times by listing a combination of most likely passwords such as birthdays, anniversaries, and birthplaces. A strong password should be impossible to guess and features a combination of symbols, alphanumerics, and long dictionary words. Additionally, if a criminal manages to guess the password, a payment processor must have a 2-factor authentication process through email or 2fa apps such as Google auth.
A payment business could also implement 3D Secure to prevent chargebacks in eCommerce payments and unauthorized card processing. A network of card processors, merchants, and financial firms share data through 3D Secure to authenticate transactions. Using 3D secure also helps payment gateways to comply with regulations and laws.
5. Monitor Fraud Continuously
Transaction processors should put in place fraud detection mechanisms and auditing systems to monitor the gateway processor. The business should write down guidelines for supervising the systems in place and identify any suspicious activities. These guidelines should align with the risk tolerance of a business and have to flag down highly risky transactions. At times, the gateway has to manually approve transactions associated with large amounts.
6. Training Employees
Effective payment gateways ought to equip employees with knowledge and skills to identify and respond to potentially suspicious activities. The team should learn to handle the security of transactions and how to recognize fraudulent intrusion.
7.Request Credit Card Verification Value (CVV)
CVV is used to authenticate transactions through phone or online when the card is not present. The phone or email verification could ascertain a transaction and give it a greenlight when for instance, credit card credentials have been stolen.
8. Payment Tokenization
Credit card tokenization executes credit card information as a string of random alphanumerics known as tokens. The token is secure and can be sent across the internet to successfully complete an encrypted payment. Only the recipient can decrypt the transaction, hence preventing exposure to outside criminals.
9.Strong Customer Authentication
Strong Customer Authentication (SCA) is used to eliminate or reduce instances of fraud by validating customers through a thorough authentication process. Strong customer authentication could involve a combination of either fingerprint or voice recognition, a company badge, smartphone, identification card number, and password.
10.Updated Software Stack
Updating softwares and operating systems is not limited to financial payment companies. Most companies forget this crucial task and end up costing their business more than they would have lost had they updated their software in time. Updates usually fix security issues and implement the latest security protocols that were not available in a previous version.
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