Online payment security: 8 Steps to ensure safe transactions

February 27, 2020 | David Smith

This blog was written by an independent guest blogger.

Online shopping has become an increasingly popular trend in the past few years as people find it more convenient to buy from the comfort of their homes. You can get pretty much anything and everything from online stores: groceries, clothing, jewelry, electronics and other household items. Yet, we need to consider for a moment if all these online financial transactions taking place are safe – and how can we ensure our protection from online frauds such as identity theft and phishing attacks.

It would be a little exaggerating to say that online transactions are highly insecure. Rather, most online payment systems are relatively secure. Still, online crime is a reality and bad actors are always lurking around looking for possible vulnerabilities to grab and exploit. Unless necessary precautions are taken by both merchants and customers, payment information can be leaked and subsequently compromised. Hence, it is important for both customers and merchants to understand the basic steps to keep online transactions safe.

Let us look at 8 fundamental steps to ensure safety transactions with online payments

  1. Be compliant with PCI DSS

Before anything else, the first step to ensure safety is to make sure that your payment system is compliant with the Payment Card Industry Data Security Standard – an internationally accepted standard for secure card payments with 12 security requirements. PCI Security Standards Council was established in 2006 for regulating payment brands and helping merchants secure financial data of customers.

Regardless of the size of your business, compliance to the standard is important to ensure that you meet fundamental security requirements to process customer transactions. PCI SSC also provides online safety education to merchants and assists them in taking important steps to improve their website’s safety. They analyze your transaction system, find and fix vulnerabilities. Their compliance team then creates a report and shares it with all banks and card brands associated with your business. Compliance with PCI DSS means that your company has implemented and the requirements for card payment security.

  1. Ensure data encryption

The second step towards enhancing online payment security is to use data encryption to keep customer’s financial information private. Nowadays with open WIFI networks, identity theft is prevalent and relatively an easy task for hackers if the data is unencrypted. Websites that your business deals with for online transactions should be valid and with legitimate operators. Data encryption ensures that your sensitive information is only viewed by the authorized parties and does not fall into wrong hands. It also reduces password-hacking likelihood to a great extent. All these features combined proved an additional protection layer for customers during the transaction.

  1. Keep your network updated

Hackers regularly come up with new ways to hack into systems, and while your network may be safe from them today, it may not be tomorrow. For this reason, it is really important that your business’s computer networks have security updates regularly installed on them. The best way is to sign up for automatic system updates to stay a step ahead from new threats. Automatic update will ensure that all important safeguards are installed, the absence of which could otherwise put your online transactions security in jeopardy. Not only this, it will also reduce chances of virus attacks on your system which could impact your business negatively.

  1. Provide secure login

After taking other important security measures, the next and probably the most important step is the customer’s login process. It is critical for the system to be as secure as possible at the time of login because if it is not, it is precariously easy for cyber criminals to infiltrate your system and gain login information. In instances where a customer forgets their password, they should have to enter an email address or username to retrieve it by using the emailed link to change password. This safety protocol may seem simple but saves you from many potential threats. Even better, use two-factor authentication for login.

  1. Enable Address Verification System (AVS)

An AVS verifies the customer’s billing address against cardholder data from issuing bank. It helps detect fraud because the hacker does not usually know the billing address of the real cardholder. These systems are used in combination with CVV2 verification, which is a three-digit code on the user’s card. Asking for both AVS and CVV2 at checkout can protect against fraudulent activity.

  1. Partner with the right payment processor

Choose a reputable payment processor that prioritizes security and can accept credit and debit cards safely and securely. Besides security concerns, you also need to consider the type of payments it accepts, the fees it charges and the transaction platforms it supports.  

  1. Install SSL certificates on your website

Many small businesses overlook security, thinking that they cannot be a target. But in reality, for this very reason, small businesses are easy targets and fall prey to online transaction breaches. Make sure to get an SSL certificate for your website to protect your customers’ valuable information.

  1. Conduct security assessments

Lastly, tie up any loose ends with annual security assessments of your system conducted by experts that can perform penetration tests and vulnerability assessments to inspect your network like a hacker. They manually conduct tests, detect flaws that can be exploited and provide suggestions to improve security. Additionally, they can discover unencrypted data leakage and loopholes in wireless and network security.

Keeping customers’ information safe during transactions should be an organization’s priority and taken very seriously. Following these steps will keep financial transactions smooth and decrease the likelihood of a security breach.

David Smith

About the Author: David Smith

David Smith is a cryptographer with 12 years of experience in both the public and private sectors. He is currently working on his second startup (currently in stealth mode) that will track and interpret the use of contactless payments in the Greater China region. His expertise includes system design and implementation with contact and contactless smart cards, smart card personalization, mobile payments, and general knowledge and experience with APAC market trends and consumer preferences.

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