Ensuring a secure online payment processing for your customers is of utmost importance for today’s businesses.
On the one hand, you are probably dealing with a rising number of online transactions, and on the other, you are faced with the threat of cybercriminals and hackers endangering your customers and business integrity.
So, what should you do?
The answer lies in adopting best practices for secure payment processing. Luckily, the article we’ve prepared for you is precisely about that.
So, what are we waiting for? Let’s dive in!
- Ensuring PCI Compliance
- Implementing the 3D Secure 2 Protocol
- Using Data Encryption
- Using Payment Tokenization
- Choosing a Secure Payment Processing Software
Ensuring PCI Compliance
Any online business requiring customers to pay with their cards should ensure that payment processing is as secure as possible.
Of course, it goes without saying that you want your customers to be safe while paying on your website. But how can you know that you did all that it takes?
You’re on the right path if you comply with the Payment Card Industry Data Security Standard (PCI DSS).
What is PCI DSS?
Here’s how Daniella Balaban from CybeReady, a cybersecurity awareness training solution, explains it:
In other words, the purpose of PCI DSS is to provide regulations that companies should comply with to ensure the maximum level of their customers’ card data security.
And it’s important that your customers have that security. You certainly don’t want them to fall victim to online credit card fraud while doing business with you.
If you think that the odds of that are slim, you should reconsider.
According to the 2023 Credit Card Fraud Report by Security.org, two-thirds of people who own credit or debit cards have experienced credit card fraud at least once.
So, the idea behind complying with PCI DSS requirements is simple.
You protect your customers from fraud and, in the process, protect yourself from reputation damage, lawsuits, customer loss, and other unwanted consequences of payment processing gone awry.
There are 12 specific security requirements that you need to stick to if you want to keep payment processing secure:
Source: PCI DSS Quick Reference Guide
Although that list might seem overwhelming, there are many points in it that you most likely already practice during payment processing, like having a firewall, not using default passwords, having updated antivirus software, etc.
Ultimately, the goals of complying with PCI DSS requirements boil down to these six:
- Build and maintain secure systems and network
- Protect cardholder data
- Maintain a vulnerability management program
- Implement strong access control measures
- Regularly monitor and test networks
- Maintain an information security policy
You can read more about those goals in the PCI DSS Quick Reference Guide.
We’ll examine some of the requirements in the later sections since many are essentially common-sense advice for secure payment processing.
Implementing the 3D Secure 2 Protocol
One of the most important practices to include if you want to create a secure payment processing environment is implementing the 3D Secure 2 (3DS2) protocol.
Even if that term sounds unfamiliar to you, don’t worry, you most likely encountered that protocol many times without even knowing it.
In other words, it’s an additional layer of security requiring a customer to enter details like one-time passwords, biometric data, specific personal information, or other data inherent only to that particular customer.
And according to Alex Weinert, who leads Microsoft’s team standing between the users and the hackers, it can significantly improve the security of your payment processing.
When we’re talking about payment processing, the 3DS2 protocol requires customers to enter those details during the checkout process.
Hence, it ensures that the purchase is made by a real cardholder and not someone who stole the card information.
For example, let’s say that you found a baseball for a great price. You put it in your online shopping cart and go to checkout.
Even when you enter all the data you can see above, like an email address, card information, and anything else a website might request, the 3DS2 will ask for further proof that you indeed own the card.
For instance, that could entail providing answers to security questions you’ve set up when you registered on the website.
Only when you provide that additional information can the payment be processed.
That is just one of the ways the 3DS2 can function, called the challenge flow.
The protocol also allows for frictionless flow, which doesn’t require any additional information from the customer before authorizing the purchase.
During frictionless flow, the 3DS2 determines the risk of the transaction.
For instance, the risk is low if the merchant already has the card in the system, has a history of purchases with it, and those purchases were made from the same device.
Therefore, the system won’t challenge the customer to confirm their identity, and the purchase will be faster and more convenient.
All in all, the 3DS2 protocol is a modern solution that can increase the security of your payment processing.
By implementing it, you provide your customers with one of the most important security features they can ask for.
Using Data Encryption
When customers do business with you online, they trust you with their personal and card data. It’s your responsibility to keep that data secure.
One of the fundamental ways to do that is by using data encryption.
What is data encryption? In short, that term encompasses methods that can make the data you collect from your customers unreadable and unusable to anyone trying to access and steal it.
Here’s how Blagoja Jovanovski from PaymentCloud explains how data encryption works:
Data encryption converts readable data into text that’s only readable to those who hold the so-called encryption key.
And the key to decrypt the data should be available only to trusted persons within your company.
Luckily, today, customers can easily tell if their data may be at risk when they visit a website.
For example, they might see a screen like this:
You don’t want your customers to see a warning like this one when they visit your website.
Instead, you want them to feel safe and secure when providing you with their most sensitive and valuable data. So, how to accomplish that?
It’s a good idea to have a Secure Sockets Layer (SSL) certificate and Transport Layer Security (TLS) data encryption.
Let’s start with SSL. It encrypts communication between a customer and a business.
Also, it’s easy to notice if a website has SSL—instead of “http://”, the URL begins with “https://”, which indicates a secure connection.
You can see how that looks on Amazon’s website. The address bar can also have a padlock icon, as you can see above.
To most customers, those are already very recognizable indicators that they can trust a business, and all that it takes to form that sense of trust is one glance at the browser’s address bar.
The other integral part of secure payment processing is TLS data encryption.
TLS is considered a more modern and updated type of encryption than SSL, as they mainly do the same thing.
Most businesses that use payment processing software today use TLS as it accomplishes the following three main goals:
- Encryption—hides the data from intruders
- Authentication—ensures that everyone exchanging information is who they claim to be
- Integrity—ensures that the data hasn’t been tampered with
In a nutshell, it’s a more robust version of SSL.
Your best bet for providing secure payment processing to your customers is to have both SSL and TLS encryption. Both are standards in the industry and shouldn’t be overlooked.
Using Payment Tokenization
Payment tokenization is a very effective and useful method for making your company’s payment processing as secure as possible.
You’re most likely familiar with the concept of tokens outside the payment processing world.
The most common examples are tokens used in a casino or the subway.
Essentially, they are a substitute for money, and you can only use them in that particular place for a specific purpose—you can’t take a casino token and buy groceries with it.
Similarly, in the world of online payments, tokenization replaces one thing with another.
In other words, something usable in many places, like a customer’s credit card data, is replaced with something unusable outside of one specific environment.
Below, you can see how that process works.
In short, when you collect, for instance, a customer’s credit card number, tokenization turns it into a random sequence of numbers, letters, symbols, etc.
The token is connected to a customer’s data.
So, when a customer makes a payment, a payment processor deciphers a token, sees the actual information behind the token, and processes a payment.
A customer’s data is always present, but it’s scrambled and meaningless to anyone who doesn’t have the key to decipher it, and only the payment processor can do that.
Also, unlike encryption, tokens aren’t just scrambled information; they aren’t in the same environment as the data they protect, either, so the risk of a data breach is minimal.
Therefore, even if a hacker somehow gets the token, it’s useless to them since it’s just a line of random numbers and symbols if you don’t decipher it.
So, instead of storing your customer’s sensitive and valuable information, you can use tokenization to replace that information with a padlock only you and your payment processor have the key to.
Choosing a Secure Payment Processing Software
So far, we’ve discussed multiple practices you can employ to make payment processing as secure as possible.
However, if you choose a great payment processing software, it can handle multiple security concerns all at once.
A secure payment processing software solution groups many security standards in one convenient package.
It is updated according to the latest security standards and uses measures that can make the difference between the safety of your customer’s data and data leaks and information thefts that can compromise your reputation and put your clients at risk.
And customers value their safety a lot when it comes to data concerning their finances.
According to a survey by Deloitte, 77% of customers consider keeping their information safe as one of the most important factors when choosing a payment method.
If you choose payment processing software that provides strong security defenses, you can avoid everything from minor inconveniences to massive hacker attacks.
For instance, even giant enterprises like Warner Music Group (WMG) aren’t always bulletproof.
When Magecart, a conglomerate of hacker groups, targeted them, the sensitive data of WMG’s customers, like credit card numbers, CVV numbers, and expiration dates, remained exposed for months.
Source: _Reflectiz_ on Twitter
The hackers targeted WMG’s ecommerce sites, and when customers made purchases on them, hackers collected their personal data.
A secure payment processing software can’t guarantee that customers’ data will always be 100% safe no matter what, but it can certainly minimize the risk involved in online transactions.
Regpack is PCI level 2 compliant, has two-factor authentication, and offers SSL data encryption.
It also provides the best in class Web Application Firewall and a host of other security features, including a dedicated team of professionals that checks every potential security concern.
In short, choosing a payment processing software like Regpack provides you with all the security features you need to guard your customers’ crucial data.
No matter what industry your company is in, if it deals with online payments, security should be at the top of your priority list.
Your customers trust you with their personal information, including credit and debit card data, and that’s something you shouldn’t take lightly.
We hope you got what you need from this article to create a secure payment processing system you can depend on.
That way, your customers will feel secure dealing with you, and your reputation as a trustworthy business will only go up.