While the digital shift of the eCommerce industry has helped boost sales, it also exposed brands to numerous vulnerabilities on the dark web. As per ACI Worldwide report, vulnerability to fraud is a noteworthy concern for consumers, concerning digital transactions. 71% of consumers are concerned about scams and frauds during online transactions.
Cyber threats and potential frauds are the biggest factors deterring customers from executing online payments and translates into the loss of sales for an online retailer. Nevertheless, with online payment security features offered by payment gateway providers, online merchants can convince customers to make secure transactions without any fear.
Online payment security refers to the safety measures and norms that safeguard customer privacy, data, and financial details. India payment gateway providers have precautions to protect merchants and users in the event of a cyber attack.
When evaluating online payment options for your business, here are the common fraudulent activities to consider, along with best practices and ways to combat them.
Threats to Online Payments
Phishing is cybercriminals posing as legitimate organizations to dupe customers with fraudulent transactions.
Phishing scams commonly happen when fake payment links or QR codes that look similar to the original ones are sent to the customers. Unauthorized payment links sent via SMS from unknown sources may also contain malware that steals financial data from the user’s mobile phone.
Merchants must warn customers of such instances and inform them to accept payment requests only from their official website.
Payment fraud, also known as identity theft, is one of the most common forms of fraud on the internet. Identity theft is when fraudsters steal a customer’s card details, banking information, or personal contact details to make payments on the merchant site. This can also include theft of user account information, names, and IP addresses.
Scammers may obtain personal information by pretending to be a trusted online authority or accessing sensitive data stored on unsecured or public Wi-Fi.
3. Authorized Push Payment
Authorized Push Payment (APP) frauds are hard to detect, given that they have an extremely convincing nature. Fraudsters manipulate customers into authorizing deposits into their bank accounts, posing as legitimate companies. The criminals then urge the users to change merchant account details and direct the funds to an account controlled by them.
APP fraud presents a challenge to online businesses as criminals get instant access to the funds, which are hard to recover.
4. DDoS Attack
In a distributed denial-of-service (DDoS) attack, untraceable IP addresses flood the merchant’s site traffic, causing servers to crash. As a result, systems get disconnected, rendering customers unable to access the website to place orders.
A DDoS attack on online payment processors can halt businesses for several hours or even days resulting in loss of sales.
Security Measures for Online Payments
As we have seen, digital payment threats are complex and occur for a variety of reasons. While there are legal remedies to restrain cybercrime, there are a few basic solutions online businesses need to practice to keep online security threats at bay. Reliable payment gateway providers can help stave off most of these threats with simple features listed below.
Let’s look at the security checkpoints that merchants and India payment gateway providers can adapt to protect online payments.
Businesses that facilitate online payments must ensure that their payment gateway application is SSL certified.
A Secure Socket Layer (SSL) encrypts all data traveling between the server and web page. When customers enter login or bank details on the merchant site, SSL encryption keeps this data safe.
The key to decoding this information is known only to the web page and server, which keeps the data safe from third-person and hackers.
When a website is not SSL enabled, it carries the “Not Secure” mark next to the URL. Potential customers might abandon the transaction if they consider the website to be unreliable.
Two-Factor or Multi-factor Authentication
Digital payment platforms commonly use Two-factor authentication (2FA) for verifying transactions that use cards, net banking, or other online modes. It helps prevent fraud arising from stolen customer data.
A multi-factor or two-factor authentication is when a payment platform requires the user to offer two or more verification details to complete a purchase. After submitting the debit/credit card details and PIN, buyers are required to enter a one-time password (OTP) sent on the registered mobile number or email.
In case of connectivity issues, payment gateway providers and bank gateways enable users to request a fresh OTP. As per standard practice, users are informed not to share OTP details with anyone.
This additional touchpoint makes the payment process more secure and requires minimal effort from both parties.
Tokenize and Encrypt
Tokenization is when credit or debit card numbers are replaced by a randomly generated text of the same length and stored in the database. Only the authorized card network can tokenize this data.
Although encryption is similar, tokenization is explicitly used for standard data types, like debit/credit cards or account numbers.
The tokens do not contain any factual information in a data breach and do not mention the actual card number. With no factual card information, fraud and data breaches are mitigated.
As technology advances, the need for improved cybersecurity for online payments is increasing. Staying informed and advocating best practices can help merchants protect consumers and their businesses. Merchants can work with India payment gateway platforms to expedite secure collection and transfer of funds.