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Payment security is a critical concern for all businesses, especially in light of the fact that 71% of companies fell victim to payment fraud in 2021. The potential costs of such fraud are significant, with the average data exposure in the United Kingdom amounting to £9 million. It’s the responsibility of businesses to make payment security a top priority, not only to protect their customers’ sensitive information and maintain consumer trust, but also to avoid substantial financial losses.
The following is a guide on payment gateways which also provides actionable steps for developing and implementing a comprehensive payment security strategy.
Understanding Payment Gateways
Consider a payment gateway as a secure digital connection between you, the merchant, and your consumers. The technology determines whether a customer’s payment is valid and then conducts the transaction securely and safely. This is especially important for online transactions, as it is impossible to scan a card physically.
The Intricate Working of Payment Gateways:
Consumer checkout: the consumer presses the “pay” button on your website or application.
Payment gateway: the payment gateway is activated to protect customers’ sensitive information from cybercriminals by encrypting data and utilising fraud prevention tools. In addition, it facilitates communication between your website and the payment processor to guarantee that all is in order.
Authorisation request: the bank verifies the information and confirms that your consumer has the necessary funds to pay.
Approved/Declined: The bank informs you of its decision.
Funds transaction: the money is transmitted from the customer’s account to a retaining account for your use.
Order confirmed: Upon receipt of the confirmation, you and your client are prepared to proceed with the customer’s order. The entire process is completed in seconds, guaranteeing a secure and seamless experience for all.
Payment Gateway Types
There are two primary categories of payment gateways: hosted and integrated.
Hosted payment gateways redirect your customers to a secure and reputable third-party payment page and return them once the transaction is approved. This solution is fast and straightforward, particularly for smaller businesses that may lack the in-house technical expertise to establish an integrated gateway. Additionally, it alleviates your security concerns. Nevertheless, you have lesser control over the transaction design.
Integrated payment gateways simplify the purchasing process by preventing consumers from being redirected from your website. Although setting up these systems may necessitate some technical expertise, they frequently provide additional features and greater control. Consequently, they are an advantageous alternative for organisations that possess IT expertise. Additionally, they enable you to personalise the purchasing process to align with your brand.
What types of businesses should address payment security?
Payment security is a matter of concern for all businesses that handle, store, or convey payment details, such as credit card data.
Payment security is a concern for a variety of enterprises, including:
E-commerce enterprises Online retailers and service providers that accept payments through their websites or mobile applications must implement encryption, secure payment gateways, and other security measures to protect customer data during transactions.
For example, regular payments at some of the leading online casinos that sell online gaming services are often met with high security. You can try it yourself, but those planning on venturing into such an industry must always prioritise customer security, especially when it involves a risk to funds, bank accounts, and personal information.
Stores that are physically located Physical retail establishments that utilise point-of-sale (POS) systems to process payments, including card-present transactions, must guarantee the security of their stored customer data, network infrastructure, and payment terminals.
Businesses in the hospitality industry To safeguard customer data, hotels, restaurants, and other hospitality businesses that process visitor payments must implement robust payment security measures, including tokenisation, access controls, and secure point-of-sale systems.
Other businesses that should address payment security include non-profits, B2Bs, hospitality businesses, and any business that accepts recurring payments.
How to develop a payment security strategy
The security of payments is a multifaceted issue that necessitates a diverse and adaptable solution set. However, by taking the appropriate measures, a secure environment that encourages consumer confidence and facilitates effective compliance procedures can be established.
The subsequent procedures delineate the process by which businesses can establish a comprehensive payment security strategy:
Conduct a risk assessment
Examine your current payment processes, infrastructure, and systems to identify potential vulnerabilities and areas for enhancement. Identify the categories of sensitive data that your business manages and the locations where it is processed, stored, and transmitted.
Comprehend the necessary regulations
Familiarise yourself with the standards and regulations that regulate your industry, such as PCI DSS, and ascertain your business’s specific compliance requirements based on the markets in which you operate. Ensure that you comprehend the security controls and practices required by these standards.
Create security policies and procedures
Develop explicit policies and procedures regarding payment security, such as policies regarding the management of sensitive data, employee training, access controls, and incident response. Ensure that these policies and procedures are consistent with industry standards and regulations.
Implement security protocols
Adequate security measures, including tokenisation, robust authentication, encryption, and firewall configurations, should be implemented under your risk assessment and compliance requirements. Select secure payment gateways and collaborate with PCI DSS-compliant vendors to optimise compliance initiatives.
Conduct stress tests and monitor systems
Consistently assess your payment systems, networks, and applications for potential vulnerabilities or hazards. Strategies such as vulnerability assessments, system audits, and penetration tests can evaluate the efficacy of your security measures and identify areas for enhancement.