When Is a Payment Gateway Considered Secure?

By Clinton Courier | July 12, 2022 |

Online Payment are easy and convenient way to allow sellers to accept credit card payments without being concerned about setting up payment processors. However, these touchpoints can attract hackers who want to steal funds from your business. Finding a secure payment gateway and a payment processor will help keep your Merchant account safe and your customers’ trust intact.

How Does a Payment Gateway Work?

Encryption

The buyer must fill in details, including their card information, on the payment page during check out. Data can then get forwarded to a payment gateway that encrypts the data between the customer and the merchant.

Authorization

Payment processing involves forwarding the information to the card association. After the issuing bank receives the authorization request, they will authenticate the details. Regardless of approval or decline, the bank sends a message to the payment gateway.

Settlement

After all the details are verified and confirmed, the Merchant account receives the funds. This entire process can be termed credit card processing.

What Happens With Your Personal Data?

A payment gateway receives your data to facilitate an online transaction on behalf of the merchant. The payment gateway remains a co-controller of the personal data obtained, as the origin of the data determines its role as controller.

Apart from facilitating online transactions and payments, it may also use such personal data for any extra related functions such as fraud screening. When they use personal data for these different purposes, they assume the role of the data controller since they independently determine their intent and means.

Your data has to be used to comply with set laws in line with a payment gateway.

Payment Gateway Must-have Security Features

Choosing the right Payment Gateway determines the success or failure of your account. Before you resolve to a payment gateway, conduct research with all required features. Below is a list of must-have security features for a payment gateway.

Data Encryption through PCI DSS Compliance

The PCI DSS which stands for Payment Card Industry Data Security Standards is a must when processing payments. It recommends what merchants need to do for them to secure critical information in Payment processing.

It is crucial if you have a Merchant account to find a payment provider who has adhered to all security standards to manage everything. It has numerous benefits, which include:

It is a globally accepted standard

It prevents payment card fraud and data breaches

Through fulfillment, it contributes to corporate security strategy

Through compliance, customers trust you with their personal information

Tokenization

The term tokenization means replacing sensitive information with tokens into a randomly generated string of characters, reducing data breach risk. During payment processing, cardholder information gets represented using a series of characters sent to a centralized server stored securely, reducing data risk.

This payment method is preferred because PCI DSS minimizes risks in payment processors. It implies you do not have to store the customer’s card information on your server as a merchant.

SSL Protocol for Secure Connections

To ensure that you have encrypted information that authenticates a network, you require establishing an SSL for digital certification for a website.

The Secure Sockets Layer is a payment security protocol that establishes an encrypted connection between the server and the browser. They ensure the privacy of client information and the security of online transactions.

3D Secure Authentication Protocol

An added layer of information requires clients to complete an extra verification step with the card issuer during payment, and this is a 3D secure authentication protocol.

It allows the cardholder to confirm a transaction before the transaction gets done. The implication is that if the cardholder is using the card to make a purchase, the cardholder has to receive a verification update to ensure authenticity.

Common Payment Frauds to Look Out For

Friendly fraud happens when a customer pays for a service or product but initiates a chargeback. In such situations, they will contact the card issuer and deny receiving the product or service. The merchant account deducts its funds, and the client gets a settlement.

Clean fraud occurs when fraudsters analyze fraud detection systems for businesses and use valid information to impersonate the genuine cardholder.

Identity theft happens when a person conducts a fake transaction under the pretense of another. Fraudsters steal someone else’s banking information and use the new identity to make false transactions.

Conclusion

Ensuring your online payment service is secure involves protecting your account from hackers. It is also about protecting your customers from fraud attacks on the internet, which can cause serious problems for your business when customers are left out of pocket by fraudsters.

According to a survey by Comodo and TransUnion, 48% of shoppers say eCommerce sites threaten their personal information. Find an authentic payment gateway to ensure that you are not among them.