Secure Payment Processing 101

As a small business owner, you know that it’s important to accept as many forms of payment as possible. This way, you can ensure that your customers can pay the way they want to, and you can reach a wider audience, increasing your opportunities for making a profit.

However, apart from providing your customers with payment processing flexibility, you need to make sure that your customers’ data is safe and secure. So, what are the different types of secure payment processing? And which one is right for your business? Let’s take a look.

WHY IS SECURE PAYMENT PROCESSING NECESSARY?

As a merchant, you must do everything possible to assure your consumers that the transactions on your website are safe. Customers aren’t thinking about the whole payment procedure while purchasing from an online store, so it’s up to you to pick the best option for them.

Consider the most recent data breaches. Even the most well-known businesses are not immune to cybersecurity concerns. As a result, it’s generally preferable to be proactive in terms of secure online payment processing rather than hoping for the situation to pass you by.

Because credit card transactions remain one of the most frequent paying methods, they are also one of the easiest targets for fraudsters. Hackers have a profound grasp of how new technologies operate, so they are always looking for ways to exploit payment solutions.

WHAT MAKES A PAYMENT SECURE?

When we talk about making a payment secure, there are three key factors to consider:

1. Authentication: This is the process of verifying that the person making the purchase is who they say they are.
2. Confidentiality: This ensures that only the parties involved in the transaction can see the information being exchanged.
3. Integrity: This means that the data cannot be altered without detection.

There are various sorts of secure payment processing, each with its own benefits and drawbacks. Although it’s nearly impossible to eradicate fraud, several methods exist to protect your data and prevent it from being stolen.

It is advised to use as many of them as you can to protect secure online payment processing to the maximum extent possible.

SECURE PAYMENT PROCESSING METHODS

Here are some of the most popular secure payment processing methods you can use in your business:

SECURE SOCKETS LAYER (SSL) ENCRYPTION

One of the most common methods of securing payment information (especially in the case of online merchants and e-commerce) is Secure Sockets Layer (SSL) encryption. SSL certificates create a secure connection between a web server and a web browser. This encrypts sensitive information, such as credit card numbers, so that it can’t be read by anyone who doesn’t have the key to decrypt it.

SSL encryption involves two keys: a public key, known to everyone, and a private key, kept secret by the recipient of the message. When a user initiates a transaction or enters sensitive information into a website, this secure payment processing solution turns it into an indecipherable format that can only be made readable again by the server with the corresponding private key.

Most e-commerce platforms offer SSL protection, but you’ll need an SSL certificate installed on your server. You can purchase an SSL certificate from many different companies.

When you do it, there will be an “https://” prefix added to your website’s URL, typically accompanied by a padlock icon in the browser’s address bar. In this way, the visitors of your website will know it’s secure and will be less afraid to provide you with their sensitive data.

The Benefits of SSL Encryption:

• User Data Protection: The SSL encryption blocks anyone on the website from accessing sensitive information.
• Shield Against Hackers: With this secure payment processing solution, your website will be better protected against hacking.
• Improving SEO: SSL encryption is a factor that is taken into account in search engine rankings and can boost your website’s SEO performance.
• PCI Standards Compliance: With this solution, your website will meet the Payment Card Industry standards.

TRANSPORT LAYER SECURITY (TLS) ENCRYPTION

TLS is the successor to SSL and is now the most common form of encryption used on the internet. TLS encrypts data in transit so that it can’t be read by anyone who doesn’t have the key to decrypt it.

Like SSL, TLS creates a secure connection between a web server and a web browser. But unlike SSL, TLS uses more robust algorithms to encrypt data. As a result, TLS is more effective at protecting data from being intercepted and read by unauthorized parties.

TLS combines symmetric and asymmetric encryption, making sure that the sensitive data can only be decrypted by the intended recipient and providing higher security.

The most significant stage of providing protection for the data here is the so-called TLS handshake. It is the moment when the client and server specify which version of the TLS they will use, decide on the cipher suite, authenticate the identity of the server and generate session keys for encrypting messages.

The Benefits of TLS Encryption:

• Improved Security: TLS offers stronger encryption algorithms and advanced authentication tools, so it provides you with excellent protection for data in transit.
• Compliance and Trust: Implementing TLS is essential for meeting various regulatory requirements and standards, as well as for building trust in online transactions.
• Great Performance: Innovations implemented in TLS significantly improved its performance, shortened the loading times and enhanced the protection against hackers.

TOKENIZATION

Tokenization is a process that replaces sensitive data, such as a credit card number, with a randomly generated string of characters called a token. The token is then used in place of the sensitive data.

Tokenization is often used in conjunction with encryption. Even if a hacker were to intercept the token, they wouldn’t be able to read it or use it to make a purchase.

Tokenization can be used for various purposes, such as protecting sensitive data in bank transactions, keeping medical records in healthcare payment and patient data systems, stock trading, applying for loans, and more.

Tokens can be generated in various ways, such as:

• Using a hash function or other nonreversible function
• Using an index function or randomly generated number
• Using a mathematically reversible cryptographic function with a key

The Benefits of Tokenization

• High Security: Tokens cannot be decrypted or reversed back into the original data without access to the original tokenization system, which significantly improves the data protection on your website.
• Minimal Impact on Systems: Tokenization can be implemented with minimal changes to the existing systems and processes, so you can introduce it without causing any significant difficulties.
• Liquidity: Thanks to tokenization, historically illiquid assets can improve their liquidity. Namely, an asset can be represented as numerous tokens, allowing for fractional ownership.

3-D SECURE

3-D Secure is a security protocol that adds an additional layer of protection to online credit and debit card transactions. Visa and Mastercard developed the protocol to help reduce the risk of fraud.

When you use 3-D Secure, you’re prompted to enter a password or code when you make a purchase. This helps verify that you are the cardholder and that the transaction is legitimate.

Importantly, the password you need to enter is typically a one-off PIN sent to your phone and valid for just a short time, so it is much more difficult for hackers to access.

The Benefits of 3-D Secure

• Improved Authentication: With the temporary password requirement, 3-D Secure helps to make sure that the transaction is initiated by the rightful owner of the card.
• Fraud Prevention: By verifying the cardholder’s identity, 3-D Secure significantly reduces the risk of unauthorized card use and associated fraud losses.
• Increased Customer Confidence: With more secure payment processing solutions like 3-D Secure, you can improve customer confidence, potentially increasing their loyalty and sales.

POINT-TO-POINT ENCRYPTION (P2PE)

Point-to-Point Encryption (P2PE) is a technology that encrypts data when entered, transmitted, or stored. P2PE ensures that your credit card information remains encrypted at all stages of the transaction process, regardless of whether you’re using an online payment processor or a mobile app.

The process begins when a customer swipes, inserts or taps their credit or debit card on a P2PE-enabled payment terminal. The card data is immediately encrypted within the terminal, which uses a secure encryption key management system.

Then, the encrypted data is transmitted through the merchant’s network and payment processors, keeping its secure, unreadable form until it reaches the solution provider’s decryption environment.

Here, the data is decrypted and sent to the payment card network for authorization. The response is encrypted once more and sent back through the chain to the merchant, providing end-to-end secure payment processing.

The Benefits of Point-to-Point Encryption (P2PE)

• Easy Integration: You can integrate the system with the use of ChipDNA SDK easily, so it should not cause you any significant issues during implementation.
• Lowering the Risk of Cardholder Data Fraud: By protecting the card transactions in your business, you are building trust and lowering the danger of any data fraud.
• Better Compliance: Merchants using P2PE solutions can benefit from a reduced PCI DSS compliance scope, potentially lowering the costs and complexities associated with compliance efforts.

COMBINING SECURE ONLINE PAYMENT PROCESSING METHODS

Merchants must be aware that one tool alone cannot protect their businesses. They’ll need a multilayer strategy with more security. Because secure payment processing is such an emotive subject, make sure you pick the best payment partner for your business.

An experienced and knowledgeable secure payment processing company will provide you with the best solutions for your organization, increasing the safety of sensitive data processing to the maximum. They know how to adjust the payment security options to the industry, and they will tell you what’s the most recommended method in your case.

Knowing that you are lowering the risk of fraud as much as possible, you can carry out safe and reliable transactions. It will be beneficial for both your business and its integrity, and the building customer trust.

The Benefits of Combining Secure Payment Processing Methods

• Comprehensive Protection: Different secure payment processing methods offer unique security features, so if you combine them, you can offer protection against a wider range of threats.
• Improved Customer Experience: Various customers may have different preferences when it comes to secure online payment processing options, so offering more of them can meet a higher variety of their requirements.
• Easier Global Market Expansion: Regions and countries may have different standards and laws concerning secure online payment processing, so if you want to expand your business and reach new markets, using multiple secure online payment processing methods will certainly help you.
• Competitive Advantage: Offering a wide range of secure payment options can set a business apart from competitors, attracting customers who value security and convenience.
• Deeper Data Insights: Each payment method may offer unique insights into customer behavior and preferences, helping in data-driven decision-making and targeted marketing strategies.

WRAPPING UP

So, what should you look for in a secure payment processing partner? Here are four key factors to keep in mind: security, compliance, features, and customer service.

Payment Savvy is a secure payment processing company committed to meeting the highest security and compliance standards so you can feel confident that your customer’s data is protected. Plus, we offer an extensive suite of features to make managing your payments easy, and our team is available 24/7 to help with any questions or concerns you may have.

Ready to switch to a more secure payment processing solution? Contact us today! We would be happy to answer any of your questions and get you started on the path to hassle-free payments.