The ABCs of Payment Gateway Security

Online shopping and digital payments are two complementary trends that have made our lives more comfortable in the last few years. 

A buyer opens a website or a mobile app, finds the goods they want to buy, adds them to the cart, makes a payment, and voila, the purchased item is on its way. 

Such a smooth and convenient way of buying things must come with a twist, right? Correct. The twist is that not all websites and apps are equally secure. 

In other words, consumers can get their personal and financial data stolen if they’re not careful enough. While they need to double-check who they’re buying from, all merchants must do everything they can to provide the highest possible security level. 

A properly secure and updated payment gateway is a guarantee of such payment experience. 

This article explains the basics of payment gateway security and how it enhances the overall business success. 

What Is a Payment Gateway?

A payment gateway is a type of software that ensures a timely and secure flow of information between the merchant’s website, cardholder’s bank, and merchant’s bank. 

When a consumer makes a payment, the payment gateway gathers and encrypts the consumer’s credit card information, only to forward it to the payment processor and merchant’s bank. The consumer’s personal and financial data is encrypted and protected from unauthorized access.

As the cardholder provides their payment data at the checkout, it is the payment gateway they’re communicating with. 

Hence, we can picture the payment gateway as the system behind the checkout page on every commercial website. 

TPP Intel: Merchants should do their homework before opting for a billing solution and calculate what’s best for them.  ThePayPortal offers various merchant-friendly services, from providing a payment gateway and fraud-mitigation tools to opening a direct merchant account. Every merchant can select one, two, or more billing services from our palette to ensure the most practical option for their needs. 

Payment Gateway Security Guardians

Now that you understand what a payment gateway is and how it works, let’s jump directly knee-deep into the matters of payment gateway security, as follows:

Encrypted Transactions

The word encryption itself already sounds protective but how does a payment gateway encrypt transactions.

In simple terms, it uses encryption protocols to cipher the transferred payment data, thus keeping it intact. This special encryption protocol used to be called the Secure Sockets Layer (SSL) but now it comes as an improved and more secure version called Transport Layer Security (TLS). When transaction information is protected with TLS – which we see as a padlock and https label in the address bar – no one can intercept or steal the given data. 

Multi-Factor Authentication

Identity theft and payment fraud don’t occur only during payment data transfers. Au contraire, such mishaps can happen at any point of the digital payment procedure. For instance, if someone has previously hacked your email account, your level of vulnerability increases dramatically. 

Therefore, payment gateways are commonly protected with multi-factor authentication. For instance, this is the case when you want to complete a purchase on an ecommerce platform, and you’re asked to provide both a credit card number and a CVV. Likewise, when you want to sign into your e-banking account, the bank sends you an SMS code that you must enter, to get access to your account. 

For digital wallets, widely provided by Samsung, Apple, Google, etc., you might be asked to provide a biometric element, such as the iris (eye scan) or fingerprint identification to complete the payment. 

Tokens for Safe Transfers

Tokenization is a security-boosting process of turning a buyer’s payment information into a token. It’s a randomly obtained group of characters that has no resemblance to the data it represents. For instance, the potential perpetrator cannot get the customer’s account number of any other intel even if they decipher a token. 

Every credible and secure payment gateway uses tokens to additionally protect cardholders’ data and prevent data breaches. 

Compliance and Regulations

Payment gateway security is neither arbitrary, nor is it defined at a local level. The Payment Card Information Data Security Standard (PCI DSS) prescribes all the security and legal requirements that a payment gateway must meet. Adopted by the PCI Security Standards Council, which was established by five largest credit card companies – Visa, MasterCard, American Express, JCB, and Discover – this is the reference system for every gateway provider.

So, when you’re choosing your billing solution, inquire about their PCI DSS compliance, as well as their implementation of all the relevant legal regulations. 

Reliable, Uninterrupted Payments

Downtime may happen in every walk of life; digital payments are no exception. Still, in an ecosystem that makes profits from transferring other entities’ money, downtime is extremely expensive. 

Not only that some customers and merchants won’t be able to send and receive money, respectively, but some reputations might be burnt. Hence, continuous uptime to facilitate safe and speedy payments 24/7/365 is one of the must-have features of a reliable and secure payment gateway. 

When looking for the right billing provider, ask about downtime backup and redundancy features, and inquire about the infrastructure supposed to provide such benefits. 

Payment Gateways and Payment Methods

Choosing a secure payment gateway is crucial but this quality alone won’t ensure proper conversion rates and business growth.

What you need is a credible and protected payment gateway that covers all the relevant payment methods. A merchant that lets their customers pay for the purchased goods in multiple ways leaves a better impression, nurtures customer loyalty, and enjoys top-tier conversions.

For starters, your website, app or subscription-based business must accept and process MasterCard and Visa. These two are the most widespread card companies around the globe, hence, every payment gateway must comply with these cards. 

Depending on your business plan and target markets, consider adding some other commonly used payment methods, like digital wallets, as well as accepting SEPA payments (digital payments within the European Union), and the most common alternative payment methods (PayPal, Klarna, Ideal, etc.).

Last, but not least, always talk about the relevant payment processing and payment gateway fees when determining the number of payment methods for your business. 

Bringing a Hacker-Proof Payment Policy

When a merchant is deciding on the payment gateway, processor, and transaction security altogether, they must have a certain point of reference. In other words, bringing a hacker-proof payment policy is to be carried out in line with certain security principles, as follows:

  • Analyze compliance regulations. Every merchant should primarily focus on their core business operations. However, it is beneficial and practical to get the gist of all the aforementioned PCI DSS for the sake of decision-making orientation.
  • Assess the potential payment risks. If you’re planning to operate in a field considered a high-risk digital niche (iGaming, adult industry, subscription-based businesses, etc.), learn what risks this specific field generates and how to avoid the potential issues.
  • Implement the security measures. In addition to the payment gateway security aspects listed above, every merchant must pay attention to their own website/app safety. The two-factor registration procedure (with a verification link), strong firewall and antivirus configurations for the website, and SSL/TSL protocols are only some of the on-site measures that need to be implemented. 
  • Supervise and test the payment system. Your security-ensuring job is not done once everything is up and working. On the contrary, make sure to have your payment system constantly supervised and tested for potential external threats and internal problems. Hire ethical hackers and penetration testers to try how secure your website and its payment system are. 
  • Build an incident plan. In the case of business data breach or other security incidents, be ready to react at once. Work with your legal department or counselors and your payment gateway provider to bring the technical procedures and legal measures to regain full-scale security. 

The Final Word

There’s no smooth and safe online paying without a trustworthy and impenetrable payment gateway. When making your decision thereof, go through everything stated in this guide and shop around to find the best deal for your needs. Depending on your business type, size, and the payment volume, go for the payment gateway that meets all these demands. 

Feel free to schedule a meeting with our payment professionals and see how we can tailor a special offer for you.