According to a survey involving more than 10,000 consumers worldwide, the majority (70%) of consumers would cease to do business with a company in case of a data breach. Another PwC survey found that 86% of respondents believe businesses are responsible for protecting consumer data. This is likely because consumers understand that they may not have sufficient knowledge or expertise to ensure their data’s security.
The findings of these surveys underscore the critical importance of data security for businesses in today’s digital age. Therefore, your clients expect you to protect their sensitive data.
In this blog post, we’ll explore the critical security risks facing businesses today and how payment processors can help to mitigate these risks.
Why Is Banking Security Important for Businesses?
Using ACH, your customers can easily purchase goods and services with just a button. However, this convenience also makes them a prime target for cybercriminals seeking access to sensitive customer data or to steal funds from their accounts.
So, are you including proactive banking security strategies in your enterprise risk management plans as a business? Here is why banking security is important:
- Protecting Financial Assets: A single data breach can compromise sensitive financial information. This will lead to significant financial losses for your business and your customers. This loss can be particularly damaging if you don’t have the resources to recover from such losses.
- Complying with Regulations: Your business needs to comply with various regulations, such as the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). Failing to comply with these regulations can lead to legal consequences, including fines and lawsuits.
- Maintaining Trust: Any breach in banking security will damage the reputation of your business and cause a loss of trust among stakeholders.
- Avoiding Business Disruption: Cyberattacks cause significant business disruption and financial loss. Banking security measures help prevent these attacks and reduce the risk of business interruption.
The risks associated with a lack of banking security are numerous and can be costly.
“The global average cost of a data breach increased by 2.6% from $4.24 million in 2021 to $4.35 million in 2022.” — The Cost of a Data Breach Report, IBM
Key Security Risks Facing Businesses Today
Data breaches are one of the most significant security risks facing businesses today, and they can occur in various forms, such as through malware, phishing scams, or insider threats.
“In 2022, the number of data compromises in the United States stood at 1802 cases, impacting 422.14 million individuals.” — Statista
Phishing attacks and social engineering are also common cyberattacks that result in data breaches and financial losses.
Additionally, fraudulent transactions, such as account takeover and payment fraud, are other significant security risks.
Another key security risk that may face your business is ransomware attacks. These attacks involve hackers accessing your business’s system and encrypting your files, rendering them inaccessible until a ransom is paid. These attacks are disruptive, and you can potentially lose access to critical data and experience significant downtime.
Other emerging security risks include:
- Internet of Things (IoT) - Devices in the network are vulnerable to cyber-attacks
- Attack on customers when they use unsecured Wi-Fi networks
- Supply chain attacks
How Can Payment Processors Help to Improve Banking Security for Your Business?
Payment processors give you several ways to help mitigate key security risks facing your business today:
Data Tokenization
Data tokenization is a process where sensitive data, such as credit card numbers, is replaced with a unique token with no inherent value. Learn more about the importance of data tokenization.
So, when a customer initiates a transaction, the payment processor replaces the credit card number with a token. The token can then be used to complete the transaction without exposing the customer’s credit card details to you, the merchant, or any other third party.
This process ensures that the customer’s sensitive data is always protected during the transaction and when stored by the merchant or payment processor.
If a data breach were to occur, the hacker would only obtain tokenized data, which is useless without the encryption key held by the payment processor.
Encryption
In encryption, information is encoded so that only authorized parties can access it.
Payment processors use various encryption technologies to ensure maximum security. Some popular encryption technologies include Secure Sockets Layer (SSL) and Transport Layer Security (TLS). These technologies encrypt sensitive data, such as credit card details, as it is transmitted over the internet.
PCI Compliance
When it comes to payment processing, one of the most critical factors for your business is ensuring that it’s compliant with the Payment Card Industry Data Security Standard (PCI DSS).
PCI DSS is a set of security standards created to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment.
PCI compliance applies specifically to credit card transactions.
Achieving and maintaining PCI compliance can be a significant challenge for your business. This is because it requires a significant investment in time, resources, and technology. However, payment processors can help you with this process and make it easier for you to achieve and maintain PCI compliance.
Hosted Payment Portals
Hosted payment portals are secure web pages provided by payment processors that allow businesses to collect customer payment information securely.
For example, iCG Pay’s hosted payment pages allow you to accept ACH and credit card payments. However, they handle all the sensitive financial data for you.
In addition to improving security, hosted payment portals improve the customer experience. They do this by providing customers with a simple and secure way to make payments, boosting customer satisfaction, and encouraging repeat business.
iFrame Payment Processing
An iFrame is a secure way to embed a payment form directly into your business’s website, allowing customers to make payments without leaving the site. Simply put, when your customers make a payment, they will not be redirected to a different page.
A payment processing platform like iCG Pay offers iCG Pay-Hosted iFrame payment processing. The iCG Pay iFrame can be integrated with the following solutions:
- Tokenization
- Mobile payment processing
- Recurring payments
iCG-Verify
As a business owner, you want to protect your business and customers from financial loss.
One costly problem that many businesses face is the potential for returned and unpaid checks, which can result in costly fees and lost revenue. Fortunately, payment processors like iCheckGateway.com offer a solution to this problem with their iCG-Verify service. iCG-Verify gives businesses real-time access to positive and negative account information and checks level status.
This solution helps businesses identify and eliminate the potential for fraudulent activity at the point of sale, reducing the likelihood of returned and unpaid items. With the ability to quickly identify possible fraudulent transactions, businesses can protect themselves from costly financial loss.
Nacha Regulations and Compliance for Electronic Checks
While PCI compliance is crucial for credit card transactions, you must also adhere to regulations set forth by Nacha (National Automated Clearing House Association).
For example, Nacha requires merchants to authorize and authenticate electronic check transactions. Merchants must obtain written or electronic authorization from the customer before initiating an ACH transaction. This authorization must include clear and conspicuous notice of the transaction terms, including the payment amount, frequency, and timing. To ensure compliance with these Nacha regulations, your business should work with payment processors specializing in ACH transactions and have a strong track record of compliance with Nacha rules.
Payment processors will help you implement the security protocols and ensure all transactions are appropriately authorized and authenticated.
Key Security Features to Look For in a Payment Processor
- Secure Hosting - A safe hosting environment ensures that top-notch security measures, including firewalls, intrusion detection, and prevention systems, protect your customers’ data.
- Encryption - Look for payment processors that use encryption technology to protect data in transit, such as SSL or TLS encryption.
- Fraud Prevention Technologies - Is the payment processor offering fraud prevention tools like address verification, CVV2, and AVS?
- Tokenization - Tokenization technology ensures that sensitive data, such as credit card information, is replaced with a unique, non-sensitive token during the transaction process, further minimizing the risk of a data breach.
- PCI Compliance - Payment processors that are PCI compliant follow strict security standards set by the Payment Card Industry Security Standards Council, ensuring that all transactions are handled securely and in compliance with industry standards.
Real-World Benefits of Choosing a Secure Payment Processor
Choosing a secure payment processor usually positively impacts customer trust and loyalty. By demonstrating a commitment to security and protecting customer information, your business can differentiate itself from competitors and build a reputation as a trustworthy and reliable service provider. Furthermore, a secure payment processor streamlines payment processes and improves the overall customer experience.
With features like tokenization and encryption, payment information is securely stored and automatically populated, reducing the need for customers to repeatedly enter sensitive information. This convenience and peace of mind leads to increased customer satisfaction and retention.
