Digital payment security and encryption

Published: 11 August 2020

Reading time: 4 minutes

Protecting sensitive data has never been more crucial. The manner of protection often depends on what kind of data you are safeguarding and how important or sensitive it is to you, your organization, or your customers. Secure payment services are an important aspect of online trading.

To supply the highest level of security for their customers, merchants should work with a payment service provider that is dedicated to risk and fraud management. There are a number of key factors that merchants should look out for when selecting their PSP, including real-time monitoring of fraud, analysis of data and managing chargebacks effectively. It is important to understand the exact requirements of the business and tailor their services accordingly.

There are two points of the merchant vulnerabilities in the payment process where merchants are concerned about payment process where sensitive cardholder data is at risk of being exposed or stolen:
1. Pre-authorization – When the merchant has captured a consumer’s data and it is being sent or waiting to be sent to the acquirer/processor.
2. Post-authorization – When cardholder data has been sent back to the merchant with the authorization response from the acquirer/processor, and it is placed into some form of storage in the merchant environment. Merchant must understand where vulnerabilities exist and reduce the risks of a data breach.

On the other hand, consumers using older smartphones may be at risk for the latest viruses and malware. Hackers are always on the hunt for new ways to get what they want, and older smartphones can be more prone to hacks and viruses. Some hackers will even hold smartphone data hostage until the victim agrees to pay a ransom. Pop-up ads, phishing activities and fake apps that install viruses meant to steal consumers’ bank details (or to trick them into paying for goods or services they don’t want) are also on the rise. It’s clear that we all need to be aware of the genuine risks of shopping online and take steps to lower our vulnerability.

Therefore, understanding of the importance of encryption in cybersecurity practices is needed now more than ever. Passwords, server locks, firewalls and removable storage are all adequate means of securing data, but encryption is the most widely used method. Encryption converts text messages, emails, and data uploads into ciphertext, which renders them unreadable by humans.

The encryption process uses algorithms that convert data into codes so complex that the most powerful computers would take years to break them. Only a person or computer who has the correct key can quickly decrypt the information, or put it back into its original form. The decryption key is another algorithm that reverses the process of the encryption algorithm.
Cybersecurity Tips for Encryption:

  • Any sensitive information that could be accessed by hackers or cyber criminals should be encrypted.
  • Wireless devices are easier for cyber criminals to compromise than wired hardware. Because so much information is now transmitted over wireless networks, encryption becomes more important.
  • Users should keep their private keys confidential and protected with passwords.
  • Technology advances are leading to increased use of authentication based on biometrics, such as fingerprint, retina and face scans, as well as voice identification.
    Because of the risk of exploitation by hackers and cyber criminals around the globe, it’s clear that professionals who undergo proper cybersecurity training will continue to be valued by any entity that processes sensitive data. Financial firms, credit card companies, government and military agencies, and private companies of all sizes need the skills of cybersecurity specialists to keep their networks hacker-proof.

Anytime that live cardholder data is in the clear – that is, in plain text format that is readable by a person or computer – it is extremely vulnerable to theft. Cyberthieves know this and look for ways to capture a copy of that data. For example, it’s possible for a thief to siphon off the card data as it is transmitted in plain text from a card reader to the point of sale (POS) server or the merchant’s central server. Encryption of either the data itself or the transmission path the data takes along the network, or both, can vastly reduce the vulnerability of the data, which in turn reduces a merchant’s business risks.

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