The financial sector of today needs a cutting-edge solution to expedite and improve the payment process. Since the digital world is always evolving, many nations find that in order to keep up with the demands of their citizens, they must establish a payment processing business. This is especially true in the gaming industry. This is confirmed by increased deposit requests, such as, £1 minimum deposit UK casinos.
The McKinsey 2022 Global Payments Report states that the payments services sector is expanding quickly, bringing together technology companies and banks to produce comparable easy-to-use digital experiences. For example, banks are modernising their payment infrastructure and streamlining their core systems, partly in reaction to the growing popularity of online payments, open-banking regulations, and cloud computing.
Important Definitions
Finance organisations can supply businesses with various payment processing services, including payment service provider, payment facilitator, payment gateway, and payment processor. You must so decide what kind of service you wish to offer. While some payment processors just act as gateways, others join forces with Visa or Mastercard to become acquirer banks.
The MasterCard Payment Gateway Service (MPGS) allows companies to incorporate payment processing into their mobile applications and websites for online payments. A range of secure payment options are available for customers to make payments using, and MPGS’s web interface allows businesses to oversee their payment operations.
Fintech organisations seeking to stay competitive and enhance their payment processing skills should use Mastercard MPGS as a safe option. Check out our piece on how to revolutionise your payment company by reading our post on Mastercard Payment Gateaway Services Integration.
There are two more payment choices within this range: becoming a payment facilitator or a payment service provider (PSP). All of these positions require registration and are governed by several rules that standardise the procedures involved in processing payments online.
What is a Corporation That Processes Payments?
A banking institution or other third-party organisation that processes electronic payments between buyers and sellers is known as a payment processing firm. These businesses are essential to the payment ecosystem because they offer the services and infrastructure required to safely and effectively handle different kinds of electronic payments.
Payment networks, banks, merchants, and customers are just a few of the parties that payment processing firms mediate between. They provide a number of services that let companies handle their payment processes and take in consumer payments. Honest companies only work with verified clients from different industries. For example, they will never offer their services to dubious casinos that do not meet the requirements of regulatory bodies.
Why is it That Online Purchases Require Secure Payment Processing?
Your firm must fulfil its responsibilities to stakeholders, financial regulators, and consumers in order to continue operating. This implies that a variety of hazards can be reduced by using cautious payment management. With payment orchestration, many of the procedures involved in handling online payments safely may be automated in accordance with the demands and preferences of the business owner.
The following are the key factors that make safe payment processing important:
- Safeguard private information.
Online transactions are particularly prone to data breaches, which occur when hackers try to get into systems that aren’t secure enough to steal client information. Because fraudsters might exploit this sensitive data to conduct crimes against both organisations and individuals, it is imperative that it be protected. - Stop fraud.
Online retailers face a variety of fraud concerns on a regular basis, ranging from identity theft to money laundering. Secure payment processing includes fraud detection features that use machine learning algorithms, transaction pattern analysis, and monitoring for suspicious activity to instantly detect and stop fraudulent transactions. - Fulfil your obligations regarding compliance.
You must adhere to strict security standards set out by the payment industry, such as PCI DSS, in order to protect client card information during online transactions against fraud. Similarly, businesses operating in the EU must adhere to PSD2 Strong Customer Authentication (SCA), which mandates the use of multi-factor authentication in order to improve the security of online payments. You might face severe penalties and legal ramifications if you don’t follow these guidelines. - Cut down on chargebacks.
Chargebacks are a specific risk associated with online purchases; they arise when consumers contest a transaction and ask their bank or credit card issuer for a refund. By confirming the cardholder’s identity, secure payment processing can assist lower fraudulent chargebacks and spare you from financial losses and chargeback costs. - Assured worldwide expansion.
You may access a global client base with e-commerce payment processing, but various locations may have different security requirements and legislation. By using secure payment processing, companies may serve clients all across the world without sacrificing security. - Keep your reputation intact.
Data breaches have the potential to seriously harm your company’s brand and turn off customers. Customer mistrust and bad press might result from a security violation that spreads swiftly. Maintaining consumer confidence and safeguarding your brand’s reputation are two benefits of using secure payment processing.
Which Online Payment Options Are The Safest?
There are more options than ever for businesses to take payments online, but each method has its own unique set of hazards and security requirements.
Multiple levels of authentication are used by the safest online payment systems to confirm clients. Advanced security methods, such as encryption, are employed to safeguard sensitive data.
Established payment methods are generally more safe than new technologies, however this isn’t always the case. new technologies sometimes don’t have as strong of security requirements and are more likely to have security flaws that hackers may take advantage of.
The following three online payment options are the safest:
Card transactions
Among the most popular payment methods in the world is the usage of credit and debit cards. Because of this, the card payment ecosystem has produced a number of standards, technologies, and procedures that shield retailers and their clients against dishonest parties.
Every company that transmits or stores credit card information must abide by PCI DSS. This lowers the possibility that private cardholder data will be discovered by fraudsters by requiring them to maintain secure systems, encrypt data during transmission, put access control measures in place, and test their systems often.
Because businesses may use multi-factor authentication, which uses a mix of biometrics, One Time Passwords (OTPs), and security tokens to verify cardholder identities, card payments are also safe for them.
Electronic wallets
Consumers are adopting digital wallets – which let you store credit card information and utilise smart devices to make payments – in growing numbers because they’re convenient and improve payment security by requiring several layers of access and tokenization.
Let’s start by examining access. Usually, digital wallets are connected to certain devices that need to be unlocked via biometrics, passwords, or PINs. Then, in addition to more sophisticated security measures like fingerprint scanning or face recognition, they also utilise multi-factor authentication, which necessitates an extra verification step before completing a transaction, such as a one-time password (OTP) delivered to the user’s phone. Even in the event that the smartphone is lost or stolen, the user-specific security and this device assist prevent unwanted access.
Second, tokenization secures card information kept in digital wallets. During the transaction process, network tokens take the place of critical card information, preventing criminals from seeing any information that may be exploited.
Bank wire transfers
In general, trustworthy financial institutions’ online bank transfers are quite safe. In order to stop fraudsters from obtaining unauthorised access, the majority of banks now demand that their clients complete multi-factor authentication when making payments from their accounts. They also deploy sophisticated fraud detection techniques.
Nevertheless, bank transfers include a number of dangers for both customers and organisations. Payers run the danger of falling victim to fraud or having money accidentally diverted, and your company runs the risk of experiencing payment processing delays or incomplete payments as a result of the payer needing to get in touch with the bank to finish the transfer. To learn more in detail, you can read the overview of Paysafecard as a mode of payment.
Ten Recommended Procedures for Safe Online Payment Handling
These are the top methods that your company may use to accept safe online payments.
1. Recognise the Conditions For PCI Compliance
The Payment Card Industry Data Security Standards must be followed if your company handles, transmits, or keeps card data (PCI DSS). The easiest method to maintain PCI compliance is to never view or get the card details of your clients.
You may help safeguard your card transactions by using one of our integration options, like Frames or Mobile SDKs (software development kits), without processing the card data within your systems, and yet stay compliant. Using our Full Card API will allow you to maintain PCI compliance, but it will need additional data security measures and lengthier, more complicated documents to be completed when your annual PCI DSS assessment is due.
2. Use TLS to Encrypt Data
A vital element of safe online payments is TLS data encryption, which has now been criticized. Sensitive data, including credit card numbers, expiration dates, and CVV codes, are sent over the internet during an online purchase. This information might be intercepted by hostile actors and used for fraudulent activities if it is not properly encrypted.
TLS encryption ensures that sensitive information is delivered securely and cannot be intercepted or read by anyone other than the intended destination (your business). It secures the communication between the customer’s browser and your company’s website server.
Moreover, TLS authenticates the server, thwarting man-in-the-middle (MITM) assaults. This is crucial to make sure the client is speaking with your reputable company and not a hacker attempting to obtain their personal information.
3. Put 3D Secure 2 Into Action
The most recent iteration of the 3D Secure system, 3D Secure 2 (3DS2), is used to verify online credit and debit card transactions. It’s an extra degree of protection against fraud and unauthorised transactions for both customers and companies.
The cardholder is asked to submit extra authentication information, either a one-time password delivered to their mobile device or biometric data like fingerprint or face recognition, as part of the 3DS2 protocol’s extra step in the online checkout process. This makes it easier to verify that the customer making the purchase is the actual cardholder and not someone using their card details fraudulently.
Although 3DS2 increases security, it makes the checkout process more complicated and less user-friendly by adding extra stages. Because of this, you should weigh the convenience of your customers against the danger of fraud, and only use this protocol if it is absolutely necessary to drastically lower your fraud rates.
4. Authentication with Two or More Factors
During logins or transactions, users’ identities are verified by security methods called multi-factor authentication (MFA) and two-factor authentication (2FA). Beyond the conventional username and password combinations, they provide an additional degree of protection.
To log in or process a payment, users must supply two distinct forms of authentication. This is known as 2FA. A password or PIN is usually the first factor, and a one-time password (OTP) delivered to the user’s mobile device or a fingerprint/facial scan (biometric authentication) is the second factor that the user holds or has access to. Even if an unauthorised person manages to get their hands on the user’s password, it will be considerably more difficult for them to access an account thanks to these two unique features.
5. Need Card Verification Value (CVV) Information
When a cardholder and their card are not physically present during an online transaction, retailers can utilise the Card Verification Value (CVV) security feature to assist authenticate the identity of the cardholder. Most Visa, Mastercard, and Discover credit cards have a three-digit CVV on the back, while American Express credit cards have a four-digit code on the front.
6. Employ Tokenization for Payments
The process of replacing private payment data, such credit card numbers, with a distinct token is known as payment tokenization. The sensitive payment information does not need to be sent or stored in order to complete transactions using this token.
Another strategy to lower fraud rates is to use network tokens. Similar to payment tokenization, it substitutes tokens for sensitive card information; however, the token is issued by the card scheme, not the acquirer or payment service provider, and it is utilised throughout the payment process. As a result, network tokenization may be used to more applications throughout the payment ecosystem.
7. Verify the Security Of Your Internet Platform
You may take the following actions to maintain the security of your content management system (CMS), online payments, and website: Update your plugins and applications. Demand that clients create secure passwords.
Employ a firewall, Put TLS into practice, Make use of a CDN (content delivery network), Keep an eye out for any questionable fraudulent activities.
8. Put In Place A Fraud Detection Mechanism
Software or systems intended to recognise and stop fraudulent conduct are known as fraud detection tools. Companies employ them to guard against financial losses, identify and stop fraudulent activities, and adhere to industry rules. We’ll go over the several kinds of fraud detection technologies and their advantages below.
9. Educate Your Staff
To guarantee safe online payments, you may teach staff members in a number of ways: Give consistent instruction, Put rules and processes into practice, Stress how important security is. Ensure that workers are aware of the hazards. Promote reporting, conduct frequent security audits, Inform staff members about emerging risks, and use technology to enhance security.
You can lower the possibility of fraud and unauthorised transactions, guarantee the security of critical client information, and teach staff members on the significance of online payment security.
10. Pick a Reliable And Safe Online Payment Company
Reducing the number of parties engaged in your company’s payment lifecycle is another method to guarantee secure online payment processing. Selecting an end-to-end payment system is the most efficient method to do that.
The acquirer, gateway, and processor operations are all combined into one location by an end-to-end payment platform. This simplifies the payment process and reduces the amount of information that is exposed to other parties while enabling data to move smoothly between stages. Tokenization, 3DS authentication, and sophisticated fraud detection may all be integrated into these systems, providing you with all the resources you need to safeguard client information and combat fraud in one convenient location.
Conclusions
Before starting a startup to create a payment company, it is necessary to study in detail all regulatory legal requirements, as well as learn all kinds of risks to further prevent them.
