In the Internet’s early days, secure online payments weren’t as accessible as they are today, and most people were quite apprehensive about sending money online. From phishing scams to credit and debit card fraud, there were a lot of reasons to worry, but things have changed since then. Today, digital payments are the most secure way to send money across the world.
The journey has been a rough one, but despite the complexity of modern secure payment systems, fraud is still rampant on the Internet. As security improves, so do the tactics of the malicious, and for this reason it’s crucial for online payment systems to stay on top of their security game. In this article, we’ll explore the importance of online payment security, the risks of using an insecure payment system, and the different methods used by financial applications to ensure your money gets where it needs to go.
The Importance of Secure Online Payments
The world relies heavily on online payments, and the importance of online payment security is greater than it’s ever been before. Security breaches happen all the time, and how firms handle customer data storage and protection is crucial to maintaining a good reputation. Consumers have educated themselves, and failure to provide secure online payment channels will inevitably cause a reduction in sales and damage your brand’s image.
This makes it incredibly valuable to communicate your investments into data protection, reassuring your customers and building trust with them. From fraud-detection plugins to real-time risk engines, there’s really no such thing as too much security when it comes to online payments.
Aside from all this, cryptocurrency payments have also taken off, introducing a way for people to create secure payment channels globally without the need for a third-party service provider. However, unless you’re using a service like Binamite, accepting crypto payments can be a hassle, especially if you don’t want to hold crypto-assets.
Online Payment Security Risks
Any business accepting online payments is susceptible to payment risk. Though security researchers and other experts are constantly fortifying digital payment channels in new and innovative ways, hackers are also constantly discovering novel vulnerabilities and attack vectors to exploit Internet-based platforms and obtain sensitive data.
Data breaches are one of the most prominent risks in providing online payments. You need to store customer information somewhere, and cybercriminals can find ways to steal sensitive data, including credit card information and identification documents, from these locations. This not only puts your business at legal risk, which is expensive, but it also damages your company’s reputation.
Without SSL/TLS encryption, multi-factor authentication, and tokenization, you open your online payment system to man-in-the-middle attacks, where hackers intercept information as it’s transmitted from your website to the payment processor. However, these types of breaches can be prevented through sound security practices.
The real kicker is when your customers get hit with something you can’t protect against, like phishing. With phishing scams, hackers create fake versions of your website to trick customers into coughing up personal information.
These types of scams are infamously hard to detect, since they seem legitimate to your customers, and there’s not much you can do besides educating your customer-base on how to identify your website’s authenticity. With crypto, these risks are amplified, since cryptocurrency transactions cannot be reversed, and no one can be held accountable for attacks on public decentralized blockchains.
Payment Gateways and Secure Online Payments
Payment gateways are a critical component of business infrastructure online, enabling anyone to start accepting payments securely on the web. The banking system has been around for centuries, so it’s only natural that the most established forms of online payments are the most user-friendly. They’ve had time to gather data on customer habits, and work their systems to provide a seamless user experience.
Most payment gateways utilize bleeding edge security systems to manage the risks we discussed above, encrypting sensitive information to validate payment information and authorize transactions. However, these systems require collaboration between numerous parties such as banks and liquidity providers, as well as offices in global jurisdictions. Make no mistake – modern Internet-based payment systems are nothing short of an engineering marvel, but that doesn’t mean they can’t be better.
Using blockchain, payment gateways are becoming cheaper and more secure than ever before, cutting out the middlemen, and enabling people to do business in countries with weak banking infrastructure. For example, Binamite allows users to send money globally using blockchain networks.
When you send someone money on Binamite, the funds are immediately converted into digital assets like stablecoins. Based on the receiver’s geographic location and currency preferences, the assets are liquidated directly into their bank account, enabling you to make rapid international transfers at a fraction of the cost levied by traditional payment gateways.
Security Risks in Crypto Payments
In crypto, taking responsibility for the security of your assets is just part of the culture. This means that most non-custodial platforms expect the users to educate themselves on best practices, and will not take the blame if things go wrong. However, since fraud is rampant in the crypto space, your brand image will take a hit if you don’t have the minimum security measures in place.
Additionally, many people use centralized cryptocurrency exchanges to send, receive, and store digital assets. This can pose a huge security risk, representing a centralized point of failure from which attackers can steal funds, customer information, and more. Further, governments can sanction exchanges involved with ransomware payments, money-laundering, or any other illicit activities, making it incredibly difficult to move any funds stored on these platforms.
Most people think of their public key as a username, and their private key like a password. However, keeping your public key a secret can be just as important as hiding your private key. There’s been a recent trend of hackers defrauding crypto wallet owners by sending malicious NFTs and other digital assets to their public address. The victim gets confused, perhaps considers themselves lucky, except when they interact with the sent assets or try to withdraw them to a different wallet, the attacker is able to steal other assets stored in that address.
Certain spyware applications take note of the victim’s wallet address, replacing it with the attacker’s address wherever it’s pasted. As far as the victim is concerned, they’ve entered their own wallet address, but they’ve unknowingly just sent funds directly to the attacker. Binamite prevents this by requiring users to save and verify wallet addresses on the platform, thus removing the need to paste an address onto the platform. However, Binamite also uses a variety of methods to ensure payments are frictionless and ironclad, including:
2-Factor or Multi-Factor Authentication
If you could only use one method to make your online payments more secure, choose 2-factor or multi-factor authentication. This requires you to prove that it’s you making a transaction, and not some hacker that’s infiltrated your account.
Usually, this is done through sending a one-time password (OTP) to accounts which you definitely control, such as your primary email address or phone number. As an additional security measure, the OTP expires after a certain amount of time, which requires the attacker to have near-instant access to your most secure accounts.
Binamite takes this a step further, requiring users to integrate an authenticator application. These apps generate OTPs on your personal device, to which attackers would need physical access to steal.
PCI compliance
PCI DSS, short for Payment Card Industry Data Security Standard, is one of the most essential parts of ensuring payment security on the Internet. PCI compliance requires companies collecting customer details to adhere to certain standards, including encrypting sensitive information, keeping its systems up-to-date, and installing firewalls.
As mentioned earlier, having your personal information exposed, even if it’s something as trivial as your public address, can have dire consequences.
Communicating payment security to buyers
With online payments, especially crypto payments, your first and primary concern is getting your customers to trust you. Educating your customer-base is one of the best ways to ensure payments remain secure on your website. Whether it’s through informative guides like this one, or with verified SSL/TSL certificates and PCI compliance badges (click the padlock next to the URL bar above), it’s crucial to communicate your stance on online payments security for anyone to even consider authorizing a payment.
SSL and TLS
Secure Sockets Layer and Transport Layer Security are two protocols that let client applications communicate with servers through a secure communication channel. Using all manner of encryption techniques, SSL and TLS ensure data sent from your browser to a payment gateway cannot be intercepted or tampered with.
Tokenization
Though Binamite uses tokenization to secure payments made through the platform, this has nothing to do with crypto tokens. Tokenization is a technique that generates a unique encrypted token representing the customer’s identity. When they make a transaction, this token is used to identify ownership and authorize payments.
Intercepting this token is pointless, since no information can be gained from it. Even if they could, it’s trivial to generate a new unique token and blacklist the old one, substantially reducing fraud and identity theft through online payments.
Conclusion
Online payments security has come a long way, now being the most secure way to send money across the world. Security breaches can not only lead to a reduction in sales, they can damage a brand’s image, and most modern payment gateways use complex and rigorous security systems to manage these risks.
Blockchain-based payment gateways like Binamite are making international payments faster, cheaper, and more secure. However, fraud still happens all the time on the Internet, and it’s crucial for payment processors to continually protect their systems against both new and existing attack vectors.
