Keeping payment information secure is not a simple matter of plug-and-play services. It requires diligence in detecting and preventing fraud and reporting it when it does occur. Keeping the payment space safe is every merchant’s responsibility. Here, we discuss some of the ways in which you can protect your consumers and your business.
How to Provide Payment Security
To provide secure online payments, you must begin by analyzing the features and benefits of the payment processor you have chosen. Not only should your processor offer the various payment types you want to use, but also some basic security features for protection. Here are some of the features you should look for in a payment processor:
- PCI Compliance
This is applicable to both your payment processor and your own website. Be sure that your payment processor is PCI compliant and follows all regulations to protect consumer card data. This is a requirement that is non-negotiable if you are accepting card payments from customers.
PCI compliance is a set of regulations imposed by major card networks such as Visa and MasterCard. They require all entities that process, store, or transmit card data to follow these regulations. If you work with a payment processor who follows these protocols, the process will be much easier than doing it on your own.
- 3D Secure
3D secure is another feature to consider when reviewing your payment processor. It is a set of security features that adds an extra layer of protection to card-not-present transactions. These measures include things like biometrics to verify the identity of the purchaser. One of the best parts of 3D security is that the liability is shifted from the merchant to the bank for every verified transaction. If a fraud attempt is successful, and the criminal managed to get through 3D secure, the merchant is not liable for it in most cases.
Address verification, or AVS, is a common feature offered by most payment processors. It requires the cardholder to enter their full address, or at least their zip code when making a purchase. This information is transmitted along with the transaction data to the bank for verification during the authorization process.
Many merchants opt out of using AVS for fear of upsetting their customers. If there are too many steps in the purchase process, it could lead to abandoned shopping carts. However, the risk of fraud or a data breach is much greater than the risk of a customer who doesn’t want to enter their zip code.
If your processor offers tokenization, consider using it for extra protection. This is a process in which consumer card data, like a 16-digit card number, is replaced by a non-sensitive element called a token. This token is transmitted in lieu of the credit card number and is only traceable back to the card data by the entity for whom it is intended.
In other words, the processor takes a token and sends it through the network in place of the card data. This way, if the data is intercepted by a cybercriminal, the token will be useless to them. They can’t use it because it’s not a real card number.
- SSL Protocol
SSL is a security certificate that applies to your website and not your payment processor. Be sure that your SSL certificate is in place and up to date. It helps to encrypt data when entered on your website. It can also increase your credibility with consumers because they can see the “https” and the padlock at the beginning of your URL, which signifies that your SLL certificate is active.
How to Prevent Payment Fraud
Preventing fraud in your business is simple, but not easy. There are several things you can implement in your daily operations to help prevent fraud and provide safe payments for your customers. We recommend setting up systems to ensure these things happen daily and become routine in your business.
Analyzing data and recognizing patterns are two of the most important steps in preventing fraud. By doing these two things, you can quickly identify when something isn’t right. Luckily, there are tools you can use to help achieve this. Here are some of the ways in which you can prevent fraud in your business.
Monitor Your Orders: Inspect every order before it ships out. Pay special attention to those placed late at night or super early in the morning. These are the times during which many fraudsters place online orders. If something doesn’t seem right with an order, it probably isn’t.
Analyze Trends: Pay attention to the latest trends in cyberattacks and watch for them in your business. Cybercriminals are consistently coming up with new ways to attack and it’s important to stay abreast of them. Your payment processor likely already does this, but it never hurts to have a second set of eyes on the orders.
React Quickly: We can’t stress this one enough. If you suspect fraud, act immediately. Go through the proper channels, file a report, contact the consumer, etc. Do everything you can to stop the fraud before it happens and to communicate effectively with your customers.
Improve Customer Service: Similarly, be sure you are responding to consumer concerns in a timely manner. If someone reaches out about a product or service that they are unsatisfied with, your team should respond and try to rectify the situation. Lack of response or communication about the status of the order is likely to result in a higher rate of chargebacks.
Keep Product Information Updated: When customers buy things online, they depend on the product descriptions to be accurate and up to date. Be sure to audit your product information regularly and ensure that your customers are receiving what they are paying for. Convoluted messages can lead to more chargebacks.
Clear and Accessible Refund/Exchange Policy: Be sure that your refund or exchange policy is very clear and easy to understand. Make it easy to find on your website and consider including it in confirmation emails or receipts. The easier it is for customers to contact you regarding complaints or issues, the less likely they are to ask their bank to issue a chargeback.
Send Confirmation Emails: When customers purchase something from your website, have a system in place that automatically sends them a confirmation email. This will make them feel more comfortable that their purchase was safe, and that their product or service will be delivered. It can also help catch fraud in the process if the cardholder is not the one who placed the order.
Deliver Shipping & Tracking Information: If you sell physical products, you should also have an automated system that sends tracking updates. When the order is prepped for shipment, the customer should get an email. They should also receive an email when the product actually ships, and updates along the way. This will minimize any anxiety the customer may have about whether their purchase was legitimate.
Keep Customer Order Information on File: At the beginning of this list, we discussed analyzing trends and recognizing patterns. If you keep customer order history and information on file, you could utilize additional tools to identify when something seems wrong. If a cybercriminal gets access to your customer’s information and tries to place an order that is out of the normal pattern for that customer, you could have a system set up to flag those situations. You can then do more research and follow up with the customer to see if they placed the order or not.
How to Maximize Payment Security
Overall, if you want to minimize payment risk in your business, you need to be diligent in following security protocols. Getting your SSL certificate, working with a payment processor who is PCI compliant, and implementing fraud prevention systems are all critical steps in the protection of consumer data. Take the extra time and resources to protect those who depend on you for secure payments.