The post-pandemic period has observed a continuous spike in annual volumes of online payments. The rising market share of online payments each year is driving economic activities in various countries. However, online payments are shadowed by risks of theft & fraud. Similarly, e-payment service providers not adhering to security compliances is increasing the vulnerability of consumers and merchants. For frictionless online payment experiences, service providers must ensure appropriate security measures.
In this blog, you will learn what online payment security is, and the types of security measures.
What is online payment security?
Merchants and consumers must understand that technology comes with its pros and cons. Although you are experiencing the advantages of smooth online transactions, it consists of possible threats. There are always possibilities of hidden risks in online payment. Such risks include fraudulent transactions and thefts that can result in financial loss for merchants or consumers.
Common errors by users, such as weak passwords, not adhering to security standards, and not using secure transaction modes are daunting to the e-payment landscape. Hence, it is encouraging financial institutions to shift toward standard security compliance to avoid financial risks to consumers and merchants.
The negligence while making digital payments is an open invitation to cyber crimes and fraud. Online payment modes include Credit Cards, Debit Cards, Internet Banking, E-wallets, and many more. The time has come to incorporate advanced features for more secure payments. Moreover, using advanced technology and timely upgradation sustains security for such online transactions. Implementation of security measures increases fearlessness among merchants and consumers.
“Every online payment method has its shortcomings and loopholes, thus there is a need for robust implementation of cybersecurity measures.”
Online Payment Security Measures
Following security measures help avoid such implications and enables hassle-free transactions.
2-Factor Authentication/Multi-factor authentication
The basic security measures include either 2-factor authentication or Multi-factor authentication. 2FA comprises two security layers such as primary authentication by password and secondary authentication by using security questions, One Time Password (OTP), and SMS alerts to notify before completion of transactions. In addition, multi-factor security covers all 2FA features and includes authentication techniques such as fingerprint/iris scan and facial/voice recognition.
Secure Socket Layer (SSL) & Transport Layer Security (TLS) encryption protocols
Encryption is very crucial in online payment security. SSL protocol encrypts information such as debit/credit card details and other sensitive information. SSL protocol certificate is used in the URL of the website showcased in “HTTPS”, where “S” stands for secure. Likewise, the Transport Layer Security (TLS) protocol offers data privacy and security to avoid fraudulent activities during online payments.
Tokenization
Tokenization helps the credit card payment system by generating tokens without revealing sensitive information. It is a secure way to complete transactions without compromising financial security.
Payment Card Industry Data Security Standard compliance (PCI DSS)
Merchants and consumers are both bound by compliance with the Payment Card Industry and Data Security Standards. Adhering to DSS and other security compliances ensures protection against data thefts and fraud.
Card Verification Value (CVV)
Card Verification Value (CVV) prevents threats of stolen 16-digit numbers of credit/debit cards. CVV works as a defender and provides security for online payments. For example, if a person has a debit or credit card number, still that person will be unable to make any transaction from that card without knowing the CVV.
VPN security
Virtual Private Network provides a secure network to access the internet for safeguarding sensitive information and preventing a data breach. Similarly, VPN allows online payments without interference from a third party to ensure risk-free transactions.
QR code
Quick Response (QR) code is similar to barcodes directly linked to the merchants’ bank accounts. QR codes widely opted for secure & risk-free online transactions. QR codes are designed to secure sensitive numerical data like a bank account number. Similarly, it facilitates a hassle-free transactions platform.
3D Secure
The 3D (Three Domains) means a protocol established to prevent unauthorized access and secure card transactions of authenticated users. 3D includes merchants’ domain, domain issuing entity, and interoperable domain. Therefore, the E-commerce industry widely uses 3D security in online payment systems.
One Time Password (OTP)
OTP prevents misuse of Internet banking, card payments, and other e-payments. Authentication through OTP validates genuine users by just entering the OTP received on mobile or email to accomplish transactions safely.
Secure Payment Gateways
Payment gateways require a strong mechanism to strengthen security in online payment systems. Payment gateways are either operated by financial institutions or third-party service providers. They build a robust network of security layers with advanced technologies for risk-free e-payments.
Contactless cards
Online payment can be possible by using contactless cards where one does not need to swipe magnetic tape of cards to complete the transaction. Such contactless card payments help consumers to avoid breaches of card details like CVV or card numbers.
Wrapping up
In this digital age, the online payment system requires a robust firewall with high-security provisions. Strong safety measures implementation is helpful to defend against never-ending cyber threats and fraud in online payments. Above mentioned security measures are used by many financial institutions and third-party online payment gateways. These security measures have their own advantages and shortcomings. But using upgraded security measures is necessary for merchants and consumers for secure and risk-free online payments.
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