How do payment gateways secure your online payments?

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India’s digital and e-commerce ascendency is a miracle story. Today, through a smartphone and the internet, anybody can conduct bank transactions, shop from any corner of the world, make payments, invest in local and global markets, and run a full-blown business. 

Thanks to the 4G-5G network penetrations, cheaper data/mobile phones, and the very digitization of payments, India’s e-retail registered a CAGR of Rs.1.8 trillion (FY 2020). India is also touted to be the second-largest E-commerce market by 2034, with smartphone users reaching 860~ million before 2022. 

Digital payments, in the same light, have disrupted the cash exchange for any business or trade transaction. The digital world has moved a step forward from traditional online payments to a more reliable and secured system of transactions through India payment gateways.

What is a payment gateway?

A payment gateway is a virtual channel between an e-commerce website and the user’s payment tools (Debit, credit cards,etc.) to ensure smooth transactions and money exchange at the end of an activity. Empowered by the user’s bank, a payment gateway acts as a middleman, helping transfer payment data between a merchant (An online business like retail, travel, e-commerce, etc.) to the customer. 

Payment gateway is the backbone of the entire digital ecosystem. It is nearly impossible to use a traditional card at every brick and mortar. Also, these cards possess the risk of theft, being lost, and misuse. Expired cards and credit limits can also significantly hamper the quality of transactions. A payment gateway, through simple programming very smoothly, eliminates all the issues mentioned above. 

Payment gateways, besides being fully automated systems that secure and encrypt sensitive customer data, have seamless navigation, are easy to use, and provide customers with a plethora of payment options. The most significant advantage is it has helped massively reduce online phishing and credit/debit card frauds. 

But the interesting question is – How do payment gateways secure your online payments? 

An entire ecosystem including customer bank, merchant, and issuing banks function together to successfully generate payment links. 

Hence it becomes paramount to ensure the security and safety of all customer data and funds. India payment gateways achieve it through the following :

1. Data Encryption 

Data encryption is primarily through SSL (Secure Socket layers), network security that prevents breach or leak of any code, number, or data between two systems. This is the most critical protocol that ensures the protection of the sensitive data of users.With this in place, any data, sensitive or otherwise, is impossible to read. 

2. Tokenization 

Gateways use tokenization to ensure secure transactions. Tokenization introduces a random string of characters and numbers by declassifying data to prevent a breach. The merchant receives unique ids and numbers through this process that can substitute for traditional cards. 

3. PCI compliance 

An industry set of standard protocols applicable to all merchants, Payment Card Industry Data Security Standard or PCI DSS, ensures the highest security while making online payments. A PCI certificate provides the safety and security of data and should be a must for any payment gateway. Businesses can generate payment links to ensure that the payments made by customers are PCI compliant and free of any cyberattack attempts.

4. 3D Authentication

3D (three-domain secure) authentication is an excellent mechanism for ensuring data integrity. It shifts the liability on the user’s bank once a transaction is approved. The bank may issue a pin or a unique id to users, especially in cardless transactions.  

5. CVV and Strong customer authentication

Payment gateways, to ensure security and authenticity of the user, especially in cardless transactions, choose to verify CVV (Customer verification value) and authentication by asking for specific passwords, numbers, and peculiar questions (answers to which must have been stored before by the user)

6. Passwords

Gateways, interestingly, do not comply with ‘forgot your password’ protocols. It generates an alarm in the system, mainly leading to unsuccessful transactions. When businesses generate payment links, the system will never ask the customer to save passwords, thwarting any hacking attempt.

7. Anti-fraud programming

A combination of fraud detection tools and algo programs is used by most India payment gateways to ensure triple-layer protection from cyber attacks.

8. Monitoring 

Payment gateways have monitoring tools encrypted in their systems that are highly sensitive to user data. A transaction involving a huge corpus will send an alarm upright and bring the systems to alert. Also, these systems can recognize repeated and suspicious transactions thus, ensuring complete security to user data. 

9. IP address tally

Gateway systems can tally IP addresses and billing addresses to ensure maximum security and thus secure and valid transactions. 

These are a few protocols that ensure the payment gateways are secured tightly.

Conclusion

From barter systems to virtual payments, humankind’s exchange for value systems is remarkable. India payment gateways are among the most robust digital strategies around the world. Besides being safe and secure, they have ensured that even the most remote shift to digitalized payments, truly transacting to a Digital economy. 

Pay for an exam, book a flight or pay for travel; the payment gateways have become an integral part of the money exchange. 

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