Payment security: An in-depth, actionable guide for businesses

Payments
Payments

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Meer informatie 
  1. Inleiding
  2. What is payment security?
  3. Types of payment security
    1. Encryption
    2. Tokenization
    3. Authentication
    4. Fraud detection and prevention
    5. Payment Card Industry Data Security Standard compliance
    6. Secure payment gateways
    7. Firewall and network security
    8. Security updates and patches
  4. Which types of businesses should be concerned about payment security?
  5. How to create a payment security strategy

Every business should be concerned about payment security; 71% of businesses reported that they were targeted by payment fraud in 2021. And payment fraud can be incredibly expensive, with the average data breach in the US costing $9.44 million. Businesses must prioritize payment security to protect their customers’ sensitive information, maintain customer trust, and avoid costly financial losses.

Below is a guide with actionable steps for developing and implementing a robust payment security strategy. Whether you’re an ecommerce retailer, a brick-and-mortar store, or a SaaS provider, a strong payment security strategy is important for the success of your business.

What’s in this article?

  • What is payment security?
  • Types of payment security
  • Which types of businesses should be concerned about payment security?
  • How to create a payment security strategy

What is payment security?

Payment security refers to the systems, processes, and measures employed to protect financial transactions from unauthorized access, data breaches, and fraud. For both online and offline businesses, ensuring payment security is important for maintaining customer confidence, minimizing financial losses, and complying with relevant regulations and industry standards.

Types of payment security

There are several types of payment security measures and technologies that businesses can implement to protect financial transactions and customer data. Some of the most common types include:

Encryption

Encryption protects sensitive customer data and financial transactions from unauthorized access, tampering, and theft. There are two primary kinds of encryption: symmetric and asymmetric. Symmetric encryption involves using the same key for locking and unlocking the data, while asymmetric encryption, also known as “public-key encryption,” utilizes two keys: a public key for locking and a private key for unlocking the data. Generally, asymmetric encryption is considered to be more secure because the private key is not shared.

Businesses widely employ encryption protocols such as Secure Sockets Layer (SSL) and Transport Layer Security (TLS) to secure data transmission between customers’ browsers and business websites or payment platforms. SSL/TLS encryption uses a combination of symmetric and asymmetric encryption to establish a secure connection and safeguard data during transmission.

Businesses should use strong encryption algorithms, up-to-date protocols, and proper key-management practices, including regular key rotation and secure storage. Regular assessments and updates to your encryption systems are necessary to address emerging threats and ensure the highest level of protection for customer data.

Tokenization

Tokenization protects sensitive payment information by replacing it with unique tokens that have no intrinsic value if compromised. It deters fraudulent actors from stealing payment information by converting it to a form that, if stolen, is useless. This process significantly reduces the risk of unauthorized access and data breaches and maintains compliance with industry standards and regulations.

Payment tokenization replaces sensitive data, such as credit card numbers, with unique tokens generated by a secure system. These tokens are used to reference the original payment information, which is stored in a centralized token vault. The tokens themselves cannot be used to carry out fraudulent transactions or reverse-engineered to reveal the original payment data.

Authentication

Authentication is a fundamental payment security measure that verifies the identity of users attempting to access or complete a transaction.

There are several types of authentication, including:

  • Single-factor authentication (SFA): Requires one form of identification, usually a password or a PIN
  • Two-factor authentication (2FA): Requires two forms of identification, such as a password and a one-time code sent to a registered device
  • Multifactor authentication (MFA): Requires three or more forms of identification, which may include biometric data, security questions, or physical tokens

For businesses, 2FA or MFA can greatly improve payment security by adding an extra layer of protection against unauthorized transactions. Some of the standard authentication methods used in payment processing include:

  • Card verification value (CVV): A three or four-digit code printed on credit and debit cards, which customers must provide during online or phone transactions to prove they have physical possession of the card
  • One-time password (OTP): A unique, time-sensitive code sent to the customer’s registered device (e.g., via SMS or an authentication app) that the customer must enter to complete a transaction
  • Biometric authentication: The use of unique physical characteristics, including facial recognition, fingerprints, or iris scanning, to verify the customer’s identity

Fraud detection and prevention

These systems help businesses identify and prevent fraudulent transactions by monitoring transaction patterns, customer behaviors, and other risk factors. Techniques such as machine-learning algorithms, behavior analysis, and risk scoring can detect anomalies and prevent fraud.

Payment Card Industry Data Security Standard compliance

The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all businesses that process, store, or transmit credit card information maintain a secure environment. PCI DSS compliance helps businesses protect customer data, minimize the risk of data breaches, and avoid potential fines or penalties.

Achieving and maintaining PCI DSS compliance is important to protect your customers’ sensitive payment information and demonstrate your commitment to security. To ensure compliance with PCI DSS, businesses should take the following steps:

  • Conduct a deep risk assessment to identify potential vulnerabilities in your payment-processing infrastructure.
  • Implement necessary security measures, such as encryption, tokenization, and strong access controls, to address the identified risks.
  • Regularly monitor, test, and update your systems, networks, and applications to maintain a secure environment and stay ahead of emerging threats.
  • Train your employees on PCI DSS requirements and best practices for handling cardholder data securely.
  • Work with PCI DSS–compliant payment-processing providers, such as Stripe, to reduce the workload of your compliance efforts and ensure the highest level of security for your customers’ data.

Secure payment gateways

Secure payment gateways facilitate the processing of credit card transactions while protecting customer payment data from unauthorized access and fraud. By providing a secure channel for transmitting payment information between the customer, business, and payment processor or acquiring bank, payment gateways are an important component of a highly secure payment environment.

Key features of secure payment gateways include:

  • Encryption
    Secure payment gateways employ encryption protocols such as SSL and TLS to encrypt sensitive payment data during transmission. These protocols ensure that the communication between the customer’s browser and the payment gateway remains secure, protecting the data from interception or tampering.

  • Tokenization
    Many secure payment gateways offer tokenization services to further enhance payment security. Tokenization, which replaces sensitive payment data with unique tokens that are useless if compromised, helps protect customer data, reduces the risk of data breaches, and simplifies PCI DSS compliance for businesses.

  • Authentication and fraud prevention
    Secure payment gateways implement various authentication methods, such as CVV/CVC checks, 3D Secure, and biometric authentication, to verify customer identity and prevent unauthorized transactions. Additionally, they employ systems for advanced fraud detection and prevention that use machine learning, behavior analysis, and risk scoring to identify and block fraudulent transactions in real time.

  • Compliance with industry standards
    Secure payment gateways adhere to PCI DSS and other relevant industry standards, ensuring that they maintain a secure environment for processing, storing, and transmitting cardholder data. Working with a compliant payment gateway reduces the burden on businesses to fulfill these requirements independently.

  • Uptime and reliability
    A secure payment gateway must maintain high uptime and reliability to ensure that customers can complete transactions without interruptions. Regular monitoring, redundancy measures, and robust infrastructure enable the gateway to consistently process transactions securely and efficiently.

When choosing a payment gateway, consider the security features, PCI DSS compliance, ease of integration with your existing systems, transaction fees, and customer support. By partnering with a reputable and secure payment gateway—or choosing a payment processor such as Stripe that provides payment-gateway functionality—you can provide a simple, secure payment experience for your customers while protecting your business from potential financial and reputational risks.

Firewall and network security

Firewall and network security help protect payment infrastructure and confidential customer data from external threats, such as hackers, malware, and other malicious actors.

A firewall is a type of security system that acts like a security guard for a computer network, controlling the information coming in and going out based on specific rules. Firewalls create a protective barrier between a trusted network inside a business, such as the payment system, and the untrusted outside world, such as the internet, helping prevent unauthorized access to the network. Firewalls can be hardware based, software based, or a combination of both.

Some key aspects of firewall and network security for businesses include:

  • Network segmentation
    Dividing the network into smaller, isolated segments helps limit the potential damage of a security breach. By keeping sensitive payment data and systems in separate network segments, businesses can better protect these assets from unauthorized access and minimize the workload of PCI DSS compliance.

  • Intrusion detection and prevention systems (IDPS)
    IDPS solutions monitor network traffic for suspicious activity, detect potential threats, and take action to prevent or mitigate those threats. By using a combination of methods, such as checking for known threats and analyzing communication rules, IDPS solutions can identify and block many types of attacks, even those that are brand new.

  • Strong access controls
    Access controls such as multifactor authentication (MFA), role-based access control (RBAC), and the “principle of least privilege”—which is the practice of granting individuals or entities the minimum level of access necessary to perform their specific tasks or functions related to payment processing—help ensure that only authorized users can access network resources and sensitive payment systems.

  • Security monitoring and incident response
    Continuous monitoring of network activity, coupled with a well-defined incident response plan, helps businesses quickly identify and respond to security threats, minimizing potential damage and downtime.

Invest in firewall and network-security solutions that align with your specific business needs and risk profile. By implementing these security measures, you can protect your payment infrastructure from external threats, safeguard your customers’ data, and maintain your business’s reputation.

Security updates and patches

Software vendors, hardware manufacturers, and operating-system providers release security updates and patches to address known vulnerabilities, bugs, or other security issues in their products. Regular security updates and patches are critical components of maintaining a secure environment for businesses. They help protect payment infrastructure, customer data, and other critical systems from vulnerabilities, cyberattacks, and unauthorized access.

Applying these updates and patches on a regular basis helps businesses:

  • Fix vulnerabilities
    Updates and patches resolve security flaws or weaknesses that hackers could exploit to gain unauthorized access to your systems or steal sensitive data. By staying up-to-date with security patches, you can decrease the risk of data breaches and cyberattacks.

  • Improve performance
    Updates often include performance enhancements, bug fixes, or new features that can improve the overall stability, efficiency, and functionality of your systems and software.

  • Maintain compliance
    Regulatory requirements often dictate that businesses apply security updates and patches in a timely manner to maintain compliance. Regularly updating your systems can help you avoid fines or penalties associated with noncompliance.

  • Protect against emerging threats
    Cyber threats continue to evolve as hackers discover new vulnerabilities and develop new attack techniques. Applying updates and patches helps you stay ahead of these emerging threats and maintain a secure environment.

Every business needs a thoughtful playbook for managing payment security. To ensure regular security updates and patches, businesses should take the following steps:

  1. Establish a patch-management policy: Develop a clear policy that outlines your organization’s approach to patch management, including responsibilities, priorities, timelines, and procedures for applying updates and patches.
  2. Monitor for updates: Stay informed about new updates and patches by subscribing to security advisories or newsletters from software vendors, hardware manufacturers, and operating-system providers. Additionally, consider using automated tools that can help identify missing patches or outdated software.
  3. Prioritize and schedule updates: Assess the severity of identified vulnerabilities and prioritize updates based on risk. Schedule updates and patches during periods of low system usage to minimize disruptions to your business operations.
  4. Test and deploy updates: Before deploying updates and patches, test them in a controlled environment to ensure compatibility and identify potential issues. Once testing is complete, deploy the updates and patches to your production environment.
  5. Review and audit: Regularly review your patch-management process to ensure it is effective and complies with your organization’s policies and industry standards. Conduct periodic audits to verify that all systems are up-to-date and secure.

Which types of businesses should be concerned about payment security?

All businesses that process, store, or transmit payment information, including credit card data, need to be concerned with payment security. Regardless of the size, industry, or type of business, maintaining secure payment processes is important for protecting sensitive customer data, ensuring customer trust, and complying with industry standards and regulations.

Some common types of businesses that need to be concerned with payment security include:

  • Ecommerce businesses
    Online retailers and service providers that accept payments through their websites or mobile applications need to implement secure payment gateways, encryption, and other security measures to safeguard customer data during transactions.

  • Brick-and-mortar stores
    Physical retail stores that process payments using point-of-sale (POS) systems, including card-present transactions, must ensure the security of their payment terminals, network infrastructure, and stored customer data.

  • Hospitality businesses
    Hotels, restaurants, and other hospitality businesses that handle payments from guests must implement strong payment security measures, such as secure POS systems, tokenization, and access controls to protect customer data.

  • Businesses that accept recurring payments
    Businesses that offer services—such as utilities, telecommunications, or subscriptions—and process recurring payments from customers need to ensure the security of their payment processes and stored customer data.

  • Nonprofit organizations
    Charities and nonprofit organizations that accept donations or process payments for events, memberships, or merchandise must implement secure payment methods to protect sensitive donor and member information.

  • B2B businesses
    Businesses that process payments from other businesses, such as suppliers, vendors, or partners, must prioritize payment security to maintain trust and protect sensitive financial data.

How to create a payment security strategy

Payment security is a complex challenge that requires a diverse and flexible set of solutions. But by taking the right steps, you can create a secure environment that fosters customer trust and supports efficient compliance practices.

The following steps outline how businesses can develop a well-rounded payment security strategy:

1. Conduct a risk assessment
Begin by looking at your current payment infrastructure, processes, and systems to identify potential vulnerabilities and areas for improvement. Determine the types of sensitive data your business handles and where it is stored, processed, and transmitted.

2. Understand compliance requirements
Familiarize yourself with the standards and regulations that govern your industry, such as PCI DSS, and determine your business’s specific compliance requirements based on the markets where you operate. Make sure that you understand the security controls and practices mandated by these standards.

3. Develop security policies and procedures
Establish clear policies and procedures that address payment security, including guidelines for handling sensitive data, access controls, incident response, and employee training. Ensure that these policies and procedures align with industry standards and regulations.

4. Put security measures in place
Based on your risk assessment and compliance requirements, implement appropriate security measures, such as encryption, tokenization, strong authentication, and firewall configurations. Choose secure payment gateways and work with PCI DSS–compliant vendors to streamline compliance efforts.

5. Monitor systems and perform stress tests
Regularly monitor your payment systems, networks, and applications for potential threats or vulnerabilities. Tactics such as vulnerability scans, penetration tests, and system audits can assess the effectiveness of your security measures and identify areas for improvement.

6. Adjust your approach as indicated
Even the best-laid security strategies will need to be adjusted and adapted over time. Continuously evaluate the effectiveness of your payment security strategy and adjust as needed to address changes in your business, industry regulations, or the threat landscape. Regular reviews help ensure that your strategy remains relevant and effective in protecting your customers’ data.

7. Create an incident-response plan
Develop a well-defined incident-response plan to guide your organization in the event of a security breach or other incident. This plan should outline roles and responsibilities, communication protocols, and procedures for containing and mitigating the incident.

Learn more about how Stripe can support your business with advanced payment security and fraud prevention and discover the tools and resources available to ensure a simple, secure payment experience for your customers.

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