While online payments have become more prominent in every sector, they come with a security risk. Fraudsters are increasingly devising new ways to exploit vulnerabilities and compromise sensitive financial data. Because of this, the average cost of a data breach reached $4.45 million in 2023, a 15% increase from 2020.
Businesses today face various payment security threats, from data breaches to phishing scams. These threats jeopardize sensitive financial information and erode consumer trust and brand reputation. As cyber criminals adapt and innovate, the stakes have never been higher for companies to fortify their defenses and protect against cyber security threats.
The good thing is that payment processors like iCG Pay, formerly iCheckGateway.com, provide advanced technologies to help merchants, banks, and other businesses secure their payments.
So, what are these payment security threats? Here are the challenges businesses are facing in 2024 and the proactive measures to mitigate the risks.
What Is Payment Security?
Payment security includes the measures and protocols designed to safeguard sensitive financial information during transactions conducted through different channels, including online and mobile payments. It involves protecting data such as bank account, credit card and personal identification details from unauthorized access, theft, or fraud.
These measures are essential if you accept online payments because they ensure the confidentiality, integrity, and availability of payment data. This prevents unauthorized transactions, identity theft, and other fraudulent activities. Some of the common measures often include:
- Encryption
- Tokenization
- Multi-factor authentication
- Secure networks
- Adherence to compliance standards such as Payment Card Industry Data Security Standard (PCI DSS)
Ultimately, payment security is essential for maintaining trust between businesses and consumers. Businesses that invest in threat intelligence get to build a secure environment for financial transactions in the digital age.
What Are the Top 4 Payment Security Threats in 2024?
In 2024, the payment sector faces various sophisticated threats, posing significant challenges to businesses and consumers. Here are the top four payment security threats of the year and their implications:
Ransomware Attacks
These malicious attacks involve encrypting sensitive data and demanding ransom payments for decryption keys. Cybercriminals behind ransomware attacks often exploit vulnerabilities in outdated software, weak security protocols, or unsuspecting employees through phishing emails.
Once the attackers access your business system from the dark web, they can encrypt your files and make them unavailable until a ransom is paid. These attacks usually target critical organizations such as banking, healthcare, government, and manufacturing. The average ransom cost in the second quarter of 2023 was over 740,000, up from 328,000 in the first quarter. In 2024, this number may increase.
When these ransomware attacks happen, they disrupt business operations and jeopardize financial information, leading to potential financial losses and reputational damage.
Phishing Scams
Phishing emails remain a persistent tactic employed by cybercriminals to deceive individuals into divulging sensitive payment information. They use social engineering attacks to target business payments, typically posing as legitimate entities, such as vendors, financial institutions, or trusted partners.
They often send deceptive emails or messages to employees responsible for financial transactions, urging them to update payment information, transfer funds urgently, or click on malicious links or attachments. Because of this, they are a common security risk during the holiday season.
Once the sensitive information is disclosed, the attacker can gain unauthorized access to the business accounts and initiate transactions. The implication of this data breach is significant and is a big threat to information security because it leads to identity theft and compromised personal information.
Mobile Payment Vulnerabilities
Mobile payments are here to stay. Data shows that mobile wallets accounted for almost half of all global e-commerce payments in 2023 and are set to increase by a CAGR of 14.9% by 2027. With this popularity, mobile payments will be quite vulnerable in 2024. Cybercriminals exploit weaknesses in mobile devices and applications, such as insecure Wi-Fi networks, unencrypted data transmission, and vulnerabilities in mobile apps, to steal payment data.
Weak authentication methods and malicious mobile apps increase the risk of identity fraud and unauthorized access. Therefore, businesses must find ways to secure payment processing on mobile devices to prevent these security flaws.
AI-Powered Cyber Attacks
Artificial intelligence (AI) tools have emerged as important technologies for automating payments. Machine learning is also being used to reduce identity fraud. Despite this, cybercriminals are leveraging advanced machine learning algorithms to perpetrate sophisticated attacks with speed and precision.
These AI-driven threats pose significant challenges to traditional cybersecurity defenses, as they can autonomously adapt and evolve in real-time, making detection increasingly difficult.
One concerning aspect of AI-powered cybersecurity threats is their ability to exploit vulnerabilities across various payment systems and channels. They can be used for sophisticated phishing campaigns powered by AI-generated emails or targeted malware attacks using AI-based evasion techniques. They increase the risk of unauthorized access and data breaches and undermine trust in the integrity of payment systems.
How Can Your Business Mitigate These Payment Security Threats?
Mitigating payment security threats is crucial for businesses to protect sensitive financial data and boost customer trust. Here are the effective ways to enhance payment security:
Implement Multi-Factor Authentication (MFA)
To protect your payment systems from possible attacks, you need to require users to provide multiple forms of verification, such as passwords, biometrics, or one-time passcodes, before accessing payment systems or conducting transactions. MFA adds an extra layer of security; therefore, it’s harder for attackers to gain unauthorized access.
Regularly Update Software
Ensure that all software, including operating systems, payment processing applications, and security tools, are promptly updated with the latest patches and fixes. Adopt risk management practices to help you address known vulnerabilities and strengthen defenses against cyber threats.
Encrypt Payment Data
Utilize encryption protocols to encrypt sensitive payment data both in transit and at rest. Encryption scrambles the data especially for mobile credit card processing, making it unreadable to unauthorized parties, thus safeguarding it from interception or unauthorized access.
Conduct Security Awareness Training
You need to educate employees about common payment security threats, such as phishing scams, and train them to recognize and deal with suspicious activities. With the rise in identity theft in the financial sector, banks need to adopt such security strategies to empower employees to play an active role in safeguarding payment systems and data.
Implement Regular Security Audits and Assessments
Conduct regular security audits to identify weaknesses, assess risks, and ensure compliance with industry regulations. This proactive approach helps identify and address security weaknesses and enhance cloud security before attackers can exploit them.
Partner with a Reliable Payment Processor
Partnering with a reliable payment processor like iCG Pay is pivotal in mitigating payment security threats for your business. By entrusting transactions to a reputable processor, you leverage their robust security measures, including encryption and fraud detection systems.
Payment processors can boost banking security because they comply with industry standards, reducing the risk of breaches and penalties, especially for electronic payments. Additionally, they offer sophisticated fraud prevention tools and secure payment channels, safeguarding sensitive data during transmission.
How Can iCG Pay Help?
Poor payment security structures can significantly disrupt operations and cause financial and reputational damage. However, you can protect your business by working with reputable payment gateway providers like iCG Pay.
Our suite of solutions are compliant with Nacha security standards. Therefore, you can implement ACH processing, process credit cards, and accept electronic check payments without worrying about a data breach.
Our security solutions will keep the customers’ personal data safe. Take action today to protect your business throughout 2024. Become our partner!
