How Secure Are Your Payments? Decoding Payment Gateway Security

decoding-payment-gateway-security

The more you stay online, the higher your risk of dealing with online fraudsters. Especially if you are a business owner, you have a huge responsibity of keeping sensitive information safe and providing your customers a hassle-free payment experience. 

Payment gateways serve as middlemen between the buyer and seller in order to provide secure payments. Using a secure online payment gateway makes it easier for retailers to implement the required software and offer a smooth experience to their customers.

But the real question is, do these payment gateways offer the kind of security your business needs? And the answer is: it depends. The level of security and payment protection depends on each payment gateway service provider. It’s your responsibility to do your research and pick the perfect one.

Keep reading the blog to know more about what to look for.

Importance of a Secure Payment Gateway

A majority of payments are becoming online these days. As much as the frequency of such online payments increases, the risks and challenges that come with it are also growing. And since customers are ready to put out information and other personal data on the web without thinking much, the responsibility of ensuring safe and secure transactions fall upon businesses and payment gateways. 

Advantages and Disadvantages of Online Payments

Fortunately, the technology for detecting financial fraud is constantly improving. These tools can track and identify fraudulent transactions in real-time and see variations in behaviour to spot such malicious transactions immediately. Businesses must keep investing in e-commerce fraud-detection tools to increase the effectiveness of detection and prevention measures.

As a business, if you refrain from using secure payment gateways, all your confidential data and customer information can become easily accessible to fraudsters. And as a result, there can be serious damage to your reputation, which will, in turn, lead to poor customer service and satisfaction. 

How Do Payment Gateways Ensure Payment Security?

All around the world, payment gateways take a lot of security measures to ensure the safety and security of your transactions and other payment-related information. 

Here are the 7 most important and common security measures followed by payment gateways:

1. Data Encryption

Data encryption is one of the main ways through which payment gateways ensure payment security. Data encryption technologies prevent hackers and other third parties from accessing sensitive and confidential information. The information is only accessible to merchants and partners of payment gateways.

The payment gateway will encrypt the data when you enter your card details at the checkout. Data is then converted into code through encryption so that only those with access to a secret key can access it. The payment gateway will then decrypt the transaction using its private key.

Along with having the right data encryption tools in place, payment gateways also update it regularly to ensure maximum security. 

2. Using payment Tokenization

Since card schemes prohibit merchants from saving card numbers unless they are fully compliant with PCI DSS regulations, having a payment gateway that uses tokenization is a good choice. 

Tokens work by transforming sensitive payment information into a string of randomly generated numbers. In order to complete the payment without the risk of being exposed, the information can be exchanged through the internet or payment networks in the form of a token.

Tokenization primarily aims to prevent and minimize payment fraud. So it’s best to choose a payment gateway with tokenization as it will hugely benefit your business and customers. 

3. Secure Socket Layer (SSL)

Nowadays, almost all e-commerce businesses have an SSL certificate as it ensures the authenticity and security of your transactions. Without an SSL certificate, your entire business will be at stake, as your customers will no longer be able to trust you and purchase your products or services.

SSL is a security layer made up of a public and private key, which work together to establish a secure connection between the server and the web browser. An SSL certificate is necessary to secure online transactions and verify a website’s credibility.

However, not all websites need to have an SSL certificate. If the website directs you to a secure checkout page on the payment gateway’s domain, the payment gateway will already have an SSL certificate. In this case, the website will not require an SSL certificate as the transactions are not processed on the website directly.

4. PCI certificate

The Payment Card Industry Data Security Standards (PCI DSS) include rules and security guidelines that need to be followed by card schemes to protect sensitive information involved while processing payments. Some of these guidelines include:

  • Using a secure payment software at the point-of-sale 
  • Using a firewall on PCs and other networks
  • Encrypting sensitive customer information

Following these compliance guidelines guarantees a safe environment for credit and debit transactions, protecting customer information from fraud and card theft.

Businesses that don’t comply with these policies have higher chances of experiencing a data breach. A data breach can have serious repercussions, including expensive fines and significant reputational harm. This is why it’s always best to choose a payment gateway that follows all security standards without any compromise. 

5. Implementing 3D Secure

3D Secure is an authentication technique that was developed to tackle the issue of consumer authentication in online transactions performed with unauthorized cards. It protects online retailers from chargebacks in the event of a fraudulent transaction. This additional layer of security helps prevent malicious transactions, especially when the physical card is not present.

Additionally, when employing such technology, your responsibility is instantly transferred to the issuing bank. 

Payment confirmation through OTPs is an example of 3D Secure authorization. In this way, you can make sure that all your transactions and customer data are intact and safe. 

6. Training employees

It’s important to train your employees with the right knowledge and skills that will help them respond to problems better. Make sure that your team is well aware of all the recent rules and regulations regarding payments and data protection.

Internal training and exams are typically held on a regular basis to make sure that all staff members are knowledgeable on how to manage payment information, what to do in the event of a data breach, and how to properly inform consumers.

If you have the right team members who understand the procedures and compliances well, it is easier to manage fraudulent transactions and further strengthen against any future security breaches. 

7. Fraud-detection tools

Lastly, payment gateways need to have multiple fraud-detection tools at their disposal, to ensure high protection for your payments. 

All transactions are scanned (manually or automatically) and monitored by fraud protection systems, making it simpler to detect and prevent any potential fraudulent activity. Built-in fraud detection tools can identify the areas where there might be a genuine risk of fraudulent transaction.

As a business, you need to understand that a single fraud-protection tool is not enough for you to ensure a safe transaction process. You need to have a wider approach towards fraud detection and the safety of payments and payment-related data.

Conclusion

Having the right payment security tools can create a significant positive impact on your business. However, as a business, you don’t have to go through the trouble of setting up all these security standards. All you have to do is choose the right payment gateway that will provide all the above-mentioned security protocols to safeguard your payments and customer information. 

NTT DATA Payment Services is one of the leading payment gateway service providers that facilitates a frictionless and seamless way of accepting and managing online payments. We are powered by PCI DSS 3.2 V compliance and are 256-bit encrypted, assuring you a completely safe and secure digital payment experience.

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