Online businesses are a major part of the business world today and provide an easy way to buy and sell goods and services. The general model for online payment transactions includes five parties: clients, merchants, client financial institutions, merchant financial institutions, and payment gateways.
Payment gateways provide a secure connection to make transactions and verify, accept or reject payment transactions on behalf of merchants. The ability to transfer payments securely is an essential component of a payment gateway.
Payment gateways must ensure merchants always get paid when a purchase is made so they don’t have to worry about fraud or credit risk. They must take all precautions to ensure safe and secure transactions. Below are some of the security methods payment gateways use to protect payments.
Data encryption is the primary method payment gateways use to protect payments. After the customer enters their card details, they are encrypted via the public key and can only be decrypted by the payment gateway private key. This reduces the possibility of unauthorized access to customer data during transmission from the gateway to the receiving bank.
Like it or not, chargebacks are an inevitable factor in merchant-buyer relationships. Merchants can get chargeback management software from Accertify, a leading online gateway provider, which reduces the resources required to manage and respond to chargebacks by up to 50 percent and helps increase win rates.
Secure Socket Layer (SSL)
The payment gateway uses SSL to protect sensitive customer information. This standard security protocol establishes an encrypted channel to allow safe transfer of private data over public channels, such as between a web server and a browser. Most of the payment gateways use this protocol to make data transfer between various parties more secure.
Secure Electronic Transactions (SET)
This protocol secures the transmission of every customer’s card details during online transactions. This prevents merchants from accessing sensitive information because it blocks debit or credit card details.
Trust is built on the use of digital subscriber signatures and sensitive information is only provided to those who are needed. Mechanisms, such as using verified, digitally signed messages and public key certificates, provide a high level of security and privacy for all participants in transactions.
Tokenization replaces credit card numbers with randomly generated character strings. This one-time code or “token” cannot be traced by the cardholder and the number is meaningless without a decryption key.
In the event of a data breach, hackers are unable to decode the numbers and this reduces the risk of payment fraud through the use of stolen data. Since sensitive card data is not stored on the merchant’s network, it also protects the merchant.
PCI DSS Compliance
Payment Card Industry Data Security Standard Compliance (PCI DSS) assists merchants and financial institutions to provide secure payment solutions. Some of the requirements under this standard include:
- Use validated payment software at the point of sale or shopping cart website.
- Do not store sensitive customer data on the computer.
- Encrypt customer data transmission across all open public networks.
- Use firewalls on network and PC.
- Educate employees about security measures, such as protecting cardholder data.
Merchants using payment gateways don’t have to worry about PCI compliance as a secure payment gateway will offer level 1 PCI security.
Merchants can rely on payment gateway compliance with this security standard. Therefore, payment gateways serve as third-party solutions providing merchants with the latest and greatest security measures they need.