The unstoppable rise of ecommerce shows no sign of slowing, and today, the Internet has brought consumers and businesses closer together than ever before. In fact, compounded by the coronavirus pandemic, a record number of people are ordering online from the comfort of home, with global ecommerce revenue hitting 4.28 trillion US dollars in 2020 and projections suggesting continued growth to 5.4 trillion US dollars by 2022.
However, maintaining security across billions of transactions is a constantly evolving challenge, and the dark side of the ecommerce success story isn’t difficult to uncover. For instance, some estimates suggest that the online payment fraud could rise by 50% over the next four years to a staggering $25bn US dollars—a sobering statistic that highlights our reliance on secure payment infrastructures to power this new digital economy.
But what constitutes a truly secure online payment solution, and how can online vendors and service providers improve security and protect their customers? Here, we look at how online payment systems work and how to choose the perfect online payment solution for your ecommerce venture.
Secure Online Payment Solutions — An Overview
In 2020 alone, the global digital payment market was valued at 58.30 billion USD, with an estimated compound annual growth rate (CAGR) of 19.4% from 2021 to 2028. Driven by household names such as PayPal, Apple Pay, Skrill, and Venmo, the expansion of this sector has fuelled innovation and divergence, with each payment gateway taking a slightly different approach to payment processing and security.
Generally speaking, secure online payment solutions for ecommerce fall under one of the following three categories:
· Systems that redirect the user to another site to complete payment
· Systems that finalize the sale on site and ask the user to pay off site
· Systems that both finalize the sale and pay on site
Each of these approaches has its pros and cons, and in the race to increase conversion rates and maximise sales, ecommerce sites may feel more comfortable with one over the other. However, in each case these payment gateways will allow consumers to purchase goods or services using conventional payment methods such as debit and credit cards, bank transfers, or even smartphone or cryptocurrency payments.
Which Secure Online Payment Solution is Best?
The answer to this question will very much depend on the size and scale of your business. For example, any ecommerce concern that chooses to deal with sales and payments directly within their website will need to meet certain requirements, and the infrastructures that enable these payments to maintain high levels of security is multifaceted.
Firstly, ecommerce websites should be secured using SSL (secure Sockets Layer) or TSL (Transport Layer Security). This encrypts sensitive payment information such as credit card numbers before it is sent to the vendor. It is then decrypted on the other side so that anyone trying to intercept the information as it is transmitted will be unable to access it.
Secondly, any website taking card payments must meet PCI compliance standards, a framework of 12 technical and operational requirements as dictated by the Payment Card Industry Data Security Standard (PCI DSS). These standards can be difficult to obtain without significant investment, time, and effort.
However, any website that chooses to not deal with payment details directly and asks customers to pay off site can sidestep many of these security details by placing the responsibility on payment gateways. Here, APIs hold the key to secure and efficient payments, allowing your customers to seamlessly pay for goods while ensuring you receive the payment in a timely and efficient way.
Online Payments and APIs
APIs (Application Programming Interfaces) provide a secure link between vendors and payment processors such as PayPal and Skrill. This means your website only needs to store the minimum of sensitive information on its servers. Generally, payment gateways operate their own, highly secure servers which store payment information. This both increases security for your customers and simplifies regulatory compliance for you.
In addition to this, APIs can help detect and prevent fraud by implementing location-based verification systems that align, as well as directly linking customers to banking security systems such as 3D Secure for Visa and Mastercard payments. These verification systems place an extra layer of security on top of online payments while also reassuring the customer that their payment details are in the hands of trusted processors.
Finally, with the advent of Open Banking and PSD2, APIs are quickly evolving in new and exciting ways that increase security for all types of payment. Today, websites can connect directly with banks and payment providers while processing real-time payments and improving security.
Make and take payments with Intergiro
At Intergiro, our online platform allows merchants to take payments from customers via a secure, API-based acquiring solution. When combined with our business accounts, expenses management with virtual and physical cards, digital businesses can now manage all of their financial needs with one financial toolkit. If you would like to find out more about our merchant solutions, sign up today.