secure payments

How to Know Your Payments are Secure

June 1, 2022

There are a few different dynamics related to the secured payment environment that are presently shifting simultaneously. The most significant shift that has been in the making for nearly a decade but has recently accelerated is consumer preferences for both eCommerce andmCommerce, short for mobile commerce. This has also resulted in an increase of cashless payments, emphasizing the need for secure payment mechanisms.

The second shift is the unruly environment of cybersecurity. It is believed to be the most significant form of fraud risk that businesses are preparing for. Recently, 38% of companies surveyed are increasing their technology spending for cybersecurity to ensure secure payments. This is especially relevant since the US government recently warned that businesses will be susceptible to cyber-attacks.

As a result of these ongoing changes and new trends, it is essential to know how businesses ensure secure payments. Below we look at how payments are secured and a further review why this is important now.

What are secure payments?

A secure payment is when the payment information used in a transaction is protected via cryptographic encryption while being transmitted for payment processing. The credit card number or the debit card number, expiration date, and the three or four-digit code on the backside of a card are hidden from view and free of unauthorized access throughout the entire process.

A secure payments system ensures that personal and financial information is safe and helps builds trust in the platform on which it is used.

What are ways to ensure your payments are secure?

When customers process payments online on an eCommerce platform or any other site from which they conduct a transaction, those sites have to demonstrate how customers’ financial data is secured.

One form of security measure to check for on a site is SSL, short for Secure Socket Layer. SSL is an encryption method that ensures the security of the financial information that passes between various parties while the transaction is being processed. Customers can check if the website they’re on has an SSL certificate by right-clicking on the payment section of the website and then clicking on Properties and then Details. If the site’s list of encryption certificates has included SSL, then the website is protected by SSL encryption.

Another option would be a next-level proactive filter to detect fraud. These filters let you monitor and set limits of specific transaction thresholds and filter out certain geographical regions culpable of the higher fraudulent activity. An excellent example of one such tool is the Advanced Fraud Detection Suite from Authorize.net.

Finally, there is authentication another layer of security used to verify the cardholder’s identity by having shoppers enter the three or four-digit code on the back of their credit card, known as the Card Code Verification service. (CVV2). An alternative to CVV2 verification is the Address Verification Service (AVS), which will require the cardholder to verify a portion of their address on file with the issuing bank.

Within the authentication process, there is also the popular 3D secure optoin, which all the major card networks have adopted. 3D secure generates a one-time code sent to the cardholder to enter into the payment gateway during a transaction to verify the user’s identity. The 3D Secure protocol is considered to be a strong customer authentication security layer by many regional jurisdictions such as the EU.

Why do you need secure payments?

Security protocols have been applicable to merchants accepting card payments online for nearly two decades. The Payment Card Industry Security Standards Council (PCI SSC) introduced its first security protocol iteration in 2004, including numerous security control mechanisms and data encryption guidance.

Meanwhile, online shopping has been around since the early ‘90s. Consumers’ shopping habits via the web really started to grow over the past decade with the advent of smart devices that let them quickly look, scan, search, find, and pay for items. That adoption has further accelerated during the past couple of years, and just eCommerce alone is now expected to grow to as large as $500 billion globally[MF1] .

However, as the opportunities have grown, so have the risks. Businesses consider cyber-fraud their most significant fraud risk. Even government bodies are more vocal now, identifying the risk cyber-attacks pose to companies. Just the eCommerce industry alone is expected to lose as much as $75 billion between 2019 through 2023 globally, according to Cybersource[MF2] .

According to an American Express Digital Payments Survey, 77% [MF3] of the business surveyed have been a victim of some type of fraud relating to digital payments.

Regardless of the risks posed, consumers are increasingly more comfortable with online payments, feeling it is okay for merchants to store their payment details on their systems, and feel that additional security measures may be too cumbersome. The title theme of the 2021 American Express Digital Payments Survey was “Digital Convenience Is Here to Stay.” The survey results found that merchants are increasingly cognizant of the trends and are looking to draw a balance between that convenience and the need for enhanced security efforts.

We’ve experienced a complete paradigm shift in how we interact, do business, learn, work, shop, and pay in the past couple of years. All of these are not a foreign concepts that were suddenly introduced to us but ones that have accelerated with great intensity during this time.

As a result, the security around these behaviors has become paramount, specifically those that track our identity, finances, and spending habits. Payments is that one domain that intersects all those areas and where we should exercise great caution to ensure that there is a robust mechanism for secured payments. It is essential to understand what secure payments are, how they are achieved, and why they are crucial.


 [MF1]https://www.gartner.com/en/newsroom/press-releases/2022-04-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-reach-nearly-500-billion-in-2022#:~:text=Worldwide%20end%2Duser%20spending%20on,to%20reach%20nearly%20%24600%20billion

 [MF2]https://www.cybersource.com/content/dam/documents/en/cybersource-ecommerce-fraud-explained-ebook-2020.pdf

 [MF3]https://network.americanexpress.com/globalnetwork/dam/jcr:09c34553-b4a2-43ca-bf3e-47cbc911ea51/American%20Express%202019%20Digital%20Payments%20Survey_Insights%20Paper.pdf

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