A guide to payment security for small businesses

Guy Bauman

January 27, 2024

  • # Payment Protection
  • # Business
  • # Fraud Prevention

For small businesses today, a successful reputation requires more than just an online presence. It involves a commitment to security — protecting customers from cyber threats, data breaches, and fraud.

With so many digital threats out there, payment security is increasingly important to online customers. If someone sees that your business’s checkout process doesn’t prioritize security, they might decide it’s not worth the risk. And that means you’re losing out on their business.

Here’s how to build a robust online payment security strategy to protect you and your customers against cyber threats.

What is payment security?

Payment security involves implementing systems and standards to protect financial transactions. The goal is to protect both customers and businesses against unauthorized access, data breaches, and fraud. Key aspects of payment security include:

  1. Compliance with standards: Adherence to protocols, like those from the Payment Card Industry Data Security Standard (PCI DSS) and 3-D Secure (3DS), is a key way to safekeep financial data. These standards dictate how businesses design and implement payment security, protecting customer data and transaction security.

  2. Layers of security: Payment security should have multiple layers, each serving a specific purpose in safeguarding transactions. This approach puts more measures in place to better prevent fraudulent transactions and minimize financial losses.

  3. Evolving requirements: The e-commerce industry is growing fast, so there are more and more ways hackers can infiltrate payment information. Payment security requirements need to keep up with changing needs and standards.

5 types of payment security

When a customer goes through small business payment processing, they take quite a few steps — such as logging into an account, inputting their payment information, and agreeing to terms. There should be payment security at each of these levels to ensure consistent, adequate safety. Here are a few different ways to keep the process secure:

  1. Encryption: Encryption uses algorithms to convert sensitive data into unreadable formats, which means if hackers intercept it, they can’t use it. This method ensures that only authorized parties can decipher the data.

  2. Tokenization: Tokens are unique identifiers that replace sensitive data like credit card details in a process called tokenization. Hackers can’t reverse-engineer these tokens, so data stays safe. This method is common in payment processing systems to enhance security while processing transactions.

  3. Secure sockets layer (SSL) certificates: SSL certificates encrypt data and show users that a website is real and trustworthy. You can tell if a website has a certificate because instead of having “http” in the URL, it’ll say “https” — the “s” standing for “security.”

  4. PCI compliance: PCI sets standards for credit card payments, which include maintaining a secure network, protecting cardholder data, and regularly monitoring and testing networks. These standards help you and your customers make sure credit card payments stay secure.

  5. Two-factor authentication (2FA) or multi-factor authentication (MFA): This security measure uses multiple methods of authentication instead of one, usually combining the user’s password and a one-time password (OTP). Hackers can intercept OTPs, so another method, like biometric authentication, is usually best. It’s unlikely a hacker would be able to access two or more authentication methods — especially something biometric, like faces and fingerprints. You should also use biometric MFA to secure your financial accounts’ access points so only you and your employees can access company data.

Navigating PCI compliance in payment security

PCI compliance does two things: It offers a guideline to strengthen your business’s payment security, and it shows potential customers that you’re committed to keeping their data safe. This leads to greater peace of mind for all. On top of that, PCI compliance is mandatory if you’re dealing with credit card transaction information — and slip-ups will earn you fines from payment processing accounting providers.

Being PCI compliant means that you’re:

  • Maintaining secure networks through firewalls

  • Encrypting data in transit

  • Employing tokenization

  • Regularly updating software and antivirus for vulnerability management

  • Restricting data access to authorized personnel

  • Continuous network monitoring for vulnerabilities

  • Establishing a robust information security policy for all employees and contractors

  • Documenting and updating policies

How to develop a small business payment security strategy

To make sure your business is meeting the PCI standards, you can hire a certified professional from the PCI Security Standards Council to go through your systems and make sure everything’s up to date. Here are some additional steps you should take to establish an effective payment security strategy:

  1. Assess risk: Thoroughly comb through your current system to spot potential vulnerabilities and opportunities for hackers to intervene. Your analysis should be as comprehensive as possible, so it’s a good idea to get a professional to trace the flow of sensitive data.

  2. Implement strong web security: Make sure your website uses encryption and tokenization to safeguard transaction data like card numbers, names, and even addresses. This means sensitive information will be unreadable to unauthorized parties. An SSL certificate is a good way to do this.

  3. Choose a reliable payment processor: Partner with a PCI-compliant payment processor offering secure gateways. These gateways will have advanced fraud detection and prevention capabilities, and you’ll rest assured you’re complying with PCI standards.

  4. Use an address verification service: Use verification services to validate the cardholder's address during transactions, which reduces the risk of fraudulent activities.

  5. Train staff: Regularly train staff on security best practices, phishing scam awareness, and the importance of secure payment environments. Everyone should understand — and stay alert for — modern threats.

  6. Monitor and update systems regularly: Vigilantly monitor your secure payment systems for unusual activity, and take action fast when you spot something suspicious. That way, you’ll find security issues before they have severe consequences.

  7. Create a response plan: Develop a comprehensive response plan for potential security incidents, including data breaches and fraud attempts. This plan should outline immediate actions, notification procedures, and steps to prevent future incidents.

  8. Go through regular PCI compliance checks: Regularly review and update compliance with PCI DSS standards. This protects cardholder data as effectively as possible and helps you avoid potential non-compliance fines.

Securing business transactions with IronVest

Whether you’re a small business dealing with a few transactions every month or a large entity with a robust payment system, you need to implement strong digital security, combined with account security. Adapting to the latest technologies, including SSL certificates and secure payment gateways, is a great step — but a super app like IronVest does even more.

IronVest offers state-of-the-art business solutions that keep your and your customers’ data safe. IronVest uses continuous biometric authentication and tokenized virtual cards to protect payment and account information, stopping fraud before it happens. With virtual cards, you’ll protect your business credit cards and bank information, reducing hacks and breaches while improving operational efficiency. Try IronVest for a safer — and better — business.

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