Understanding the Security Concerns of Online Payments

starting a businessWith hundreds of millions of global consumers using the internet to purchase products and services, it should be no surprise that security is a top concern for many. Whether it is internet-based businesses handling sensitive consumer data or the consumers themselves, ensuring that would-be thieves and hackers are not privy to shoppers’ financial information is paramount.

In the UK, a variety of security measures exist to protect both businesses and shoppers from these worries. Depending on where consumers make a purchase and/or which payment methods a business offers, a variety of security concerns and protective measures exist. It is imperative that both sides of each transaction are aware of these elements and how they can be better understood in the pursuit of increased security.

To better understand those concerns and measures, let’s examine them below in a bit more detail.

Uniform, Decentralised Standards

Most bank-to-bank payment processing in the UK is done via Bacs, which has processed more than 100 billion payments over the last 50 years. While Bacs is a stand-alone entity, it also provides flexibility in the form of approved bureaux, allowing payment submissions to flow through them rather than through Bacs directly. This decentralised infrastructure presents both positives and negatives; one key advantage is that a coordinated attack on financial data is much more difficult when user information is not centralised.

With hundreds of Bacs approved bureaux processing payments through services such as Elseware, Interbacs, and AccessPay, businesses and account-holders have many local and relevant options. However, each Bacs bureau is held to tough standards and monitored by Bacs on a regular basis to ensure that the technical prowess and overall integrity of each Bacs bureau are in line with the Bacs service’s strict standards. This – by and large – provides the advantages of tough security without presenting the risks that a uniform financial operation would allow.

Stronger Website Encryption

Increasingly, merchant accounts, businesses, and even search engines have begun collaborating on ways to reduce the instances of bank account and credit card theft. One such way in which the collaboration has been evident is through stricter encryption standards for online businesses. Over the past few years alone, the strength of encryption used in financial transactions has increased magnitudes.

As an example, 256-bit AES encryption for payment processing is now the minimum standard, which is incredibly secure. According to Wired, it would take fifty supercomputers more time than the universe has existed to break such encryption. Without any specific personal information available to would-be hackers, breaking this encryption is effectively impossible.

Additionally, search engines are penalising websites that do not use Secure Sockets Layer (SSL); these certificates exist to encrypt all information users and shoppers might submit to a website that might otherwise be intercepted. It is usually easy to tell whether an online store has SSL: simply look in the URL browser bar for either a padlock or the word “secure” next to the URL. Fortunately for businesses – and online brands in general – an SSL is easy to setup and very affordable: premium solutions usually cost around ‎£50 per year, with free alternatives available for smaller businesses.

New Currencies Designed for Security

With the advent of hyper-encryption and cryptography, it was only a matter of time before new forms of currency – along with payment methods – arose. One such example of this trend is cryptocurrency.

Major names such as Bitcoin have drawn plenty of intrigue and scepticism. This form of payment revolves around P2P (peer-to-peer) transactions, cutting out the middlemen in terms of transferring payment. Because no sensitive financial information is submitted, no opportunity for theft of said information exists.

While there are security concerns with the use of cryptocurrency, those concerns are almost exclusively at the user’s end. It is also recommended that any cryptocurrency exchange involves an escrow service that verifies the goods are delivered before releasing payment to the seller. Likewise, taking proactive measures to secure desktop computers or any devices involved in storing or transmitting cryptocurrency payments is paramount.

At every point in the online payment process, security measures exist to protect both consumers and businesses. Whether purchases are made via a big business or transferred directly between peers, options exist to ensure minimal risk of theft or fraud.

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