Ensuring Secure Digital Payments: Key Tips for Businesses in the Post-Pandemic Era

Secure Digital Payments : The use of digital payments has increased in recent years, particularly since the start of the COVID-19 pandemic. However, as more consumers turn to digital methods to purchase products and services, some attackers have begun looking to exploit online security vulnerabilities and steal sensitive personal information.
While there are significant financial incentives for businesses to adopt digital payments, it is important that they understand the key security risks associated with them and implement appropriate protocols to minimize the risks to themselves and for customers. This can help them leverage digital payments while ensuring long-term viability of customer relationships.

Why is digital payment security more important today?

Lockdowns and business closures due to the pandemic have led to a significant increase in the use of digital technologies for financial transactions. At the end of 2020, nearly 80% of U.S. shoppers used some form of digital payment, according to McKinsey & CompanySM.
The transition was sudden and widespread, and many businesses lacked the cybersecurity protocols needed to protect customer data that is now exchanged online. In fact, according to the Cyber ​​Readiness InstituteTM, only 40% of small businesses had an adequate cybersecurity strategy following the public health crisis.
Many attackers have seen this trend as a very lucrative opportunity to exploit unprepared online businesses and extort customer data for financial gain, leading to an increase in attacks in recent years. An AccentureTM study reveals that cyberattacks will increase by 31% between 2020 and 2021.

Are digital payments safer than offline payments?

Digital payments are generally more secure than offline payments for several practical reasons. First, paying for goods with cash or card requires consumers to carry goods with them, potentially exposing them to theft. At this point, your money or card may be lost forever. This problem is mitigated in cyberspace, where financial transactions often involve lengthy electronic records that enable precise tracking of online consumer behavior, making it easier to detect potential fraud or theft.
Likewise, physical transactions require businesses to store cash on their premises, potentially exposing their stores to attacks. With digital payments, funds are instantly and automatically transferred directly to the merchant’s bank account, withdrawn from local locations and placed under the strictest security team.

However, there are some security issues associated with digital payments. When buyers pay online, the anonymous and relatively anonymous nature of the transaction makes it difficult to verify the identity of the seller. This can make some conventional security mechanisms somewhat obsolete, which in some cases increases the risk of fraud and theft.

What are the most common threats to digital payments?

Businesses that accept digital payments face a number of security risks, including:

Third party risk

Today, many companies rely on third parties to perform critical business functions to improve efficiency and reduce costs. This can create additional levels of risk if businesses do not properly vet their third-party vendors before establishing a business relationship. To compound the problem, many third-party providers outsource their own functions to external parties, creating risks for fourth and fifth parties.
When accepting digital payments, businesses typically work with multiple providers, including payment processors, point-of-sale system providers, payment gateway providers, and more. Inadequate third-party security controls can put all data exchanged between these devices and applications at risk.

Phishing

Historically, phishing is one of the proven methods of data theft, but it is also an effective form of hacking in the digital economy. According to a study by ProofpointTM, 83% of organizations experienced phishing attacks in 2021, an increase of 26% compared to the previous year. In a phishing attack, attackers can send harmless messages to unknown users (often in the form of emails) pretending to come from a known or trusted source (such as a bank, credit institution or a university).
A hacker often asks for sensitive personal information to fulfill an urgent request, such as filling out a loan application requiring banking information. Once the attack is complete, hackers can use your personal information to access funds from your credit cards and bank accounts. Junior employees and senior managers can fall victim to phishing attacks that expose data and lead to theft.

malware atack

Malware occurs when users download apps, files, or attachments that contain malware. Once malware infects a device, the hacker behind that software gains access to all the information stored on the device. While many businesses install firewalls and antivirus software on their desktops and laptops, they ignore these security measures on their mobile devices.

A growing number of businesses are processing payments using tablets or smartphones as the operating system at their points of sale. Potentially, storing such an amount of cardholder information could lead to a malware attack on these devices, exposing the data of anyone who made a purchase on that device.

Best practices for digital payment security

The growing use of digital payments makes protecting sensitive customer information critical to long-term stability and success in today’s economy. Fortunately, there are several steps businesses can take to strengthen their data privacy protocols and ensure the security of their digital payments. Understand :

1. Two-factor authentication
   The introduction of two-factor authentication adds a simple but effective layer of security to digital payments by strengthening the customer identification process at the point of sale. Before customers can complete a transaction, they must provide an additional form of digital identification to verify their identity. They often receive a unique code via email or SMS on their smartphone, which they must enter to complete the transaction.
   To avoid adding multiple steps and encouraging customers to abandon their cart, it’s important that your two-factor authentication protocol is transparent and doesn’t create too much hassle during the checkout process.
2. Ensure PCI DSS compliance.
   The Payment Card Industry Data Security Standard (PCI DSS) provides businesses with a detailed set of guidelines they can use to strengthen the security of customer credit card data. PCI DSS requires compliance with 12 elements, including using a secure firewall, encrypting cardholder data, regularly updating software, and limiting access to systems and devices .
   PCI DSS compliance can improve the security of digital payment systems by signaling to consumers that businesses take their data privacy and security seriously, which can help build stronger customer relationships.
3. Train employees on best practices.
   Hackers often take advantage of unsuspecting employees to gain access to critical systems and equipment. You should provide regular training to employees to ensure they are up to date with the latest security best practices. Employees should be trained to use passwords correctly, identify potential fraud, and respond to cybersecurity incidents.
4. Tokenize customer card data
   Tokenization is a secure method of payment data encryption that converts credit card information into a randomly generated sequence of numbers. This new sequence of numbers is called a token. The numbers contained in these tokens have no intrinsic value (other than the card information they represent), so they can be transferred between different parties involved in the digital transaction process without the risk of being stolen by criminals .

Secure digital payments with Comerica Bank

The trend toward digital payments and online shopping is expected to continue to grow in the coming years, providing significant opportunities for businesses to expand their operations and attract new customers. However, this also creates additional security risks that business leaders will need to address to make the most of this trend. Businesses must have a comprehensive digital strategy in place to mitigate potential risks and ensure success in this new environment.
Comerica Bank provides its customers with the solutions and expertise they need to accelerate their digital transformation and stay ahead of a changing economy. Contact us today to start the conversation.