(Editor’s note: This post about keeping your digital payments secure is provided by Genome, which offers a suite of secure digital financial services to businesses and consumers.)
Digital payments are incredibly convenient, but you should never forget about safety measures. From this post, business owners and private users will learn how to protect their online transactions.
In 2021, the total transaction value in the digital payments segment is projected to reach $6.7 trillion. It is a huge global industry that continues to evolve rapidly. No matter how quick and reliable digital payments are, they inevitably pose certain risks for consumers and businesses. You might either transfer funds to a fake account and lose them forever, or someone might gain illegal access to your account and use your money without your permission. Plus, fraudsters might steal confidential information of private users and organizations and sell it to third parties.
From this post, you will learn how to minimize the most common types of risks connected with digital payments.
Safety measures for businesses
Companies that accept digital payments should ask their customers to pass the two-factor authentication (2FA). When a user tries to log into a site or app, it will not be enough to just insert their username and password. The system will send them a one-time password to their email or via a SMS to confirm the transaction.
Another popular security measure is tokenization. It saves the consumer from sharing payment credentials for each online transaction. The user fills in his or her card number only once and the system creates a token for it. Each time the customer makes a transaction, the credit card number is tokenized with a secure key.
Address verification service (AVS) has been around for a long time but still efficiently prevents fraud and data breaches. When the client tries to carry out a transaction, the AVS verifies the data the cardholder provides against the information available with the issuing bank. Also, the system checks the card number and expiry date. Once the information is verified, the issuing bank sends an AVS code to the merchant’s payment gateway.
Three-domain secure (3DS) layers are real-time authentication services that enable merchants and issuer banks to exchange the information their clients provided for authentication. The client logs into the system with a permanent password or a dynamic one-time password.
And, of course, each company must sign a contract with a reliable payment provider that will integrate in a timely manner advanced security solutions in their workflow.
Security tips for private users
Private customers should be aware that, if they use debit cards, it might take up to 60 days to get their money back from the bank in case of a fraudulent charge. Credit card issuers ensure your savings. They will block suspicious transactions – and if your funds were stolen, you will be able to retrieve them much quicker.
Invent a unique password for each site, app and service you use. Otherwise, if hackers steal the user database of just one platform where you have an account, they will be able to access your email, web wallets, social networks and so on.
Always enable one-time passwords and two-factor authentication. This might seem annoying at first. But once you get used to these features, you will appreciate their convenience. Thanks to them, you will not lose your money even if someone steals your main password.
When possible, use biometric authentication. Yes, modern biometric systems are still imperfect. Sometimes, you can show someone else’s picture to a camera and convince the device it is you. Yet in most cases, biometrics help prevent fraud. Plus, this technology is quickly improving and has great potential for the future.
Submit minimal personal information. You do not need to fill in a detailed questionnaire to carry out an online payment transaction. If a service asks you to share excessive private data, think twice before doing so. Do they seriously need to know about your accounts in other payment systems or your full passport data?
Regularly check your financial statements for inconsistencies. According to a stereotype, if a hacker gets hold of your account, he will immediately transfer all your funds to his account. But in this case, you would contact the police right away. Smart fraudsters might use your wallet for small payments that look very natural. If you fail to recognize a charge, you should double-check whether you made the purchase.
Verify your payment recipient. Most payment systems will not allow you to cancel a transaction once you have confirmed it. If you transfer your funds to the wrong recipient, you will not be able to retrieve this money. Ideally, you should ask the recipient to send you a payment request.
Double-check QR codes. Sometimes fraudsters paste their own code over the one you wanted to scan from a public place or printed material. You might want to scan the QR code of a parking meter or an ATM – but will end up sending your banking or financial account information to fraudsters.
Strive to use only sites that employ SSL encryption. At the beginning of the URL or web address of payment pages, there should be a lock icon or “https://.” The letter “s” after the “http://” shows the site relies on SSL.
Make sure your vendor is PCI DSS-compliant. The higher the level of their certification, the better.
It is wise to always use one payment method for online transactions – and never use this card for other types of operations. The card should feature fraud insurance and provide you with detailed statements against your online shopping. You will be able to detect irregularities easily.
Digital payments are becoming more and more popular every year. To use this payment method safely, consumers and vendors need to take precautionary measures. Two-factor authentication, biometric authentication, SSL encryption, one-time passwords, tokenization, address verification service and 3-domain secure layers are among the most efficient technological solutions that prevent fraud and data breaches. Plus, customers should regularly review their transaction histories for inconsistencies.
Genome is the operating system for your financial life. They offer a complete payments platform engineered for online businesses in Europe and worldwide that enables fast, easy, low-cost and secure payments from anywhere to anyone. The platform combines access to funds in multiple currencies with the ability to spend or exchange them via web/app or using a debit or credit card. Once Genome opens your international bank account (IBAN), sending and receiving funds from anywhere in the world and in any currency is easy. So is managing your online business, all in in one place. Machine learning powered security enables advanced payment security and safe account management from anywhere.
See more here on Dispatches in our fintech archive.