Appreciating the advancement in payment technology, we do not have to worry about carrying cash around anymore. Just the Smart Cards (Debit / Credit Card) in our wallets and the payment apps on our mobiles will do the trick. With the continuous evolution of technology in the digital payment sphere, one can expect major transformation and further disruption in the coming years.

Today, every alternative payment option, be it Debit/Credit Card or Mobile Wallet has become a convenience and a popular choice for users. However, with the ease of technology-enabled convenience comes certain risks such as data breaches and security threats. This implies the need for additional precautions to protect the financial and transactional data from potential thefts.

Consumers are now spoilt for choice when it comes to payment gateways and while most offer the convenience of payment on the go with myriad benefits, the common denominator is security. It is primal for organisations to ensure safe and secure transactions to achieve success and gain consumer’s trust. 

How can companies / businesses safeguard their payments?

With the advent of newer technologies such as open banking APIs and blockchain, companies are also looking at issuing their own cards to create their own financial ecosystem. This gives them the advantage of interacting with their customers and also giving them a seamless payment experience. However, it is also essential for businesses to install necessary safety & security protocols to protect customer data and their transaction details. Here are some measures that companies could take to ensure there is no breach in their system:

Security Sockets Layer (SSL) certification

For any business doing online transactions, an SSL certificate is an absolute necessity. Installation of SSL activates the protection of any sort of communication between the server and the client. It encrypts all data points like IDs, passwords, card numbers, etc. and create a unique lock that helps companies protect the information from online hackers.

Address Verification Service (AVS)

AVS is an important tool that helps organisations to detect suspicious transactions and helps in preventing any sort of card related frauds. It helps in reconfirming the address provided by the card user with the address as per the bank’s records. Once the merchant raises a ticket to verify the customers address, the issuing bank responds with the authentication and helps the organisation to pick the next course of action i.e. to accept or decline the transaction. While this is not absolutely fool-proof, it does give businesses an added layer of security for online transactions. 

Payment Card Industry Data Security Standards (PCI DSS)

Complying your business with PCI DSS is one of the primary steps that organisations must take before accepting online payments. Launched in 2006, the PCI DSS helps in securing your online payments by providing a detailed framework of protocols and safety measures that every business must undertake. Some of the key elements of the framework are Creating Firewalls, Protection of Cardholder Data, Data Encryption, Creation of Unique IDs, etc. 

Tokenization & Encryption

In the world of digital payments, both tokenization and encryption play a crucial role when it comes to securing data. While both the technologies are mentioned together, they are completely different in terms of how they operate. Tokenization, as the name suggests, converts important data points like an account number into random characters i.e. tokens. These tokens, have no meaning or value if they are breached by hackers. Similarly, encryption uses cryptography to add an extra layer of security to keep the original data intact and makes it inaccessible to anyone without the right key.

Verification of customer transactions

Apart from using AVS, organisations should also use multiple other methods to verify customer transactions. Apart from the obvious verification via the CVV number, businesses should also invest in facial recognition technology, KYC verification etc. The extra verification steps help in businesses avoiding online frauds and stay vigilant in case of some suspicious activities being conducted from the customers’ account. Multiple fintech platforms have also initiated a video verification process, wherein the customer could shoot a quick video along with their ID document to confirm their KYC. 

Do not store payment data of customers

It’s always a good practice to keep a tab on the data being logged in to your system. One of the best methods of protecting customer data is by completely getting rid of any payment data once the transaction is complete. Storing such sensitive information puts your customers at risk of exploitation by online fraudsters.

Technical training to employees

Provide detailed training sessions to the backend team managing all the financial transactions and data management. Companies generally ignore silly human errors that could compromise customers’ financial and personal data. Conduct mock sessions on possible scenarios of data breaches that could arise during day-to-day operations which might have an impact and compromise security.  

Although one can never give 100% assurance against security threats, but being vigilant and following simple practices, can at help mitigate risks. Having a dedicated digital payment method for online transactions, using biometric authentication, when possible, not disclosing the OTPs, ATM pins, and so on to others, etc. can give you reasonable security from potential payment frauds.

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Disclaimer

Views expressed above are the author's own.

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