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How to secure online payments

11-Dec-2013

Introducing an online payment system to your website is a great way to open a new revenue stream. However, security should always remain top of mind for both business and customer, no matter how small the payments are. To ensure your business and customers remain safe when trading online, it’s best to find the right solution for payments you will be conducting.

Which forms of payment?

Depending on the amount of money involved in the transaction, there are various methods of payment that can be used. For many people, credit and debit cards are still the preferred way to pay, but if the majority of your payments involve small sums of money, you could consider micropayments systems. These can take the form of a premium rate SMS or automated telephone payment service.  

In a bid to minimise fraud, filtering (or scoring) systems can also be put in place to prevent suspicious activity.

On the other hand, if you are selling expensive items, you could provide customers with the option of paying in instalments, or with online credit. So-called ‘virtual wallets’, such as PayPal, have also made online purchases much simpler and have targeted services for small businesses.  

These are all examples of electronic payments, but bank transfers are most comment in certain countries. For example, in France payment by debit or credit card is the most frequent method of payment, but in Germany bank transfers are more widely accepted. In Italy, payment by prepaid card and PayPal is common, so if you’re introducing online payments from outside the UK, research the most appropriate system for your customer base.

Whichever solution you choose, remember to display the logos of financial partners visibly on your homepage to reassure customers of the authenticity of your payments process.

Also, it’s important to ensure your website pages are mobile friendly. Mobile commerce is a huge area for growth in businesses of all sizes, so don’t get left behind with an incompatible website.

Outsourcing for security

If you decide to outsource online payment management to a specialist company, this company will be responsible for security by encrypting data in the following ways:

  • Guaranteed privacy of data transferred via the Internet using SSL (Secure Socket Layer) standard protocol
  • Integrity of data transferred guaranteed by embedding data
  • Authentication of the different parties (trader and bank) via a shared secret key
  • Safe storage of data through compliance with Visa and Mastercard standards (known as PCI DSS)
  • Authentication of all parties involved (known as 3D secure) to keep fraud at a minimum by authenticating the user of the credit or debit card

In a bid to minimise fraud, filtering (or scoring) systems can also be put in place to prevent suspicious activity. For instance, filters can screen for payments made from billing addresses that include a postcode with previous fraudulent activity.

To conclude, an efficient payment solution needs to keep payment as simple as possible, yet it also needs to provide customers with solid security. If these conditions are met, then sales can be increased as a result.