How Do Online Payment Methods Keep You Safe Online?

payments

One of the most noticeable trends of the last couple of years has been the movement towards digital payments. While this trend was certainly already underway, the events of the COVID-19 pandemic in the last two years has accelerated this shift considerably.

According to recent statistics by the World Bank, around two-thirds of adults worldwide now make or receive digital payments. In developing economies, this has seen the share of digital payments growing from 35% in 2014 to 57% in 2021.

This trend towards digital payments and away from cash brings many benefits. Perhaps most immediately, digital payments are much faster. Rather than spending minutes counting out bills and coins for both bigger and smaller purchases, technology such as contactless payments allows you to quickly and safely make an instant payment.

While the convenience factor is certainly one of the most compelling justifications for switching to digital payment methods – this is true both for business owners and customers – one of the often overlooked benefits of digital payment methods is how much more secure they are.

Interestingly, these safety benefits extend to both in-person and online digital payments. In addition to helping you avoid carrying around lots of cash that puts you at risk of theft, digital payment methods also provide added protection when making payments in online environments.

But how exactly do digital payment methods help to keep you safe online? And what new technologies are payment providers deploying to enhance these protections? Keep reading to find out!

SSL protocol

One of the most important technologies powering the online payments sector today is what is known as Secure Sockets Layer (SSL) protocol.

SSL protocol is a technology that can be built into websites. It works by encrypting any information that is processed through the website. This is particularly useful when website users are inputting information during checkout processes. As such, information such as credit card details and other personal information can be encrypted.

To check if the website you are using has SSL protocol, look for a padlock symbol in the address bar of your browser, or look to see if the website starts with ‘https’. 

SSL technology is pretty much industry standard in sectors such as iGaming where high volumes of sensitive financial data are being processed. Many comparison sites will only list iGaming platforms that use SSL tech to keep their payment processes safe, so you can rest assured that you’re in good hands!

PCI compliance

Another safety feature that is commonly used where digital payments are being processed is PCI compliance. PCI DSS is a set of regulations that has been created by major credit/debit card brands. This set of regulations sets out specific data security requirements that merchants using and processing these cards must follow.

PCI compliance is required by these card companies as a way of ensuring that online transactions are made as secure as possible and that the risk of identity theft is lowered. Any merchant hoping to process or store any card data from these providers is required to be fully PCI compliant.

3D Secure

If you have ever made a purchase online, then you might have come across 3D Secure.

3D Secure is a relatively new innovation in the digital payments world and provides an added layer of security for digital transactions. 3D Secure is essentially a messaging protocol that uses three different domains to process and verify the transaction.

When a 3D Secure payment is initiated, the system will request users to verify the payment. Verification is done using tokens, biometrics or other information. This verification request is usually time sensitive, which also helps to clamp down on the possibility of fraud.

Address Verification Service

Also known as AVS, Address Verification Service is a security measure that is used to prevent fraudulent transactions on both debit and credit cards.

AVS is essentially a tool that verifies whether the billing address that has been provided by the cardholder to the merchant matches the address that is associated with the card. This verification process is initiated when the merchant requests authorization during a credit or debit card transaction.

Once the merchant receives a response code from the credit card processes, the transaction can be fully processed. Mismatches or misspellings of the address will prevent the transaction from going through.

Why are safe and secure online payment methods so important?

Although this is just a brief overview of some of the most commonly deployed technologies in the payment processing space, it nevertheless gives us a sense of the various different technologies on offer.

Having safe, secure and reliable online payment methods is particularly important today given the rise in digital payments fraud.

This trend is an unfortunate by-product of the rise of online and digital payments, with fraudsters finding new and innovative ways of stealing from unsuspecting customers.

Increases in online fraud are evidently a global trend, with many countries reporting significant increases in theft levels in the last couple of years.

In the UK, for example, victims lost a staggering £1.3bn in 2021 alone, which constituted an almost 40% rise in payment scams. Similarly in the US, there was a reported 25% rise in digital fraud in the first four months of 2021 when compared to the last four months of 2020.

It is this broader context that has made safe and secure online payment methods more important than ever. As the global economy increasingly takes place digitally, it will be important to continue developing new technologies that can keep pace with the criminals trying to undermine them.

In addition to developing new and cutting-edge technologies, however, it will be equally important to increase digital literacy among both adults and children. This will ensure that we are equipping ourselves with the practical knowledge necessary to keep ourselves safe online, regardless of what digital payment method we choose to use.