Digital payment technology has made tremendous strides over the years, enabling anyone to receive or make payments from almost anywhere. Offering consumers digital payment options gives lenders a significant advantage but also opens the door to potential bad actors. Financial institutions store highly valuable information, making them the perfect targets for security breaches. As a result, security risks are rising, making it essential for lenders to implement safety measures that minimize these vulnerabilities and enhance digital payment security.
This article will discuss how lenders can be proactive against cybercriminals who prey on the vulnerabilities of digital payment activities.
Today's cybercriminals are becoming more innovative, forcing companies to keep up. As a result, lenders need to understand the processes and precautions they have in place to secure their customers' payments and data. Here are a few ways that lenders can improve digital payment security.
Multi-factor authentication is a security technology requiring customers to complete a multi-step verification process. For instance, before customers can utilize digital payments, they undergo an additional verification process, such as receiving a code via email or text, to authenticate their identity beyond just their password. It's a powerful tool for securing valuable customer data, combating hackers' attack attempts and reducing the risks associated with compromised passwords.
The Payment Card Industry Data Security Standard (PCI DSS) provides companies with a set of standards from major card companies to ensure the safety and security of debit card and credit card data. These requirements include protecting cardholder data, data encryption, maintaining up-to-date software and more. By enlisting the help of a processor, such as REPAY, lenders can rest easy knowing that their digital payment security is being appropriately handled and maintained.
Payment tokenization is a PCI-approved method that safeguards card information by replacing sensitive data with a unique, non-specific, randomly generated alphanumeric code known as a token. For example, when a lender receives a payment, a token, such as a 9-digit alphanumeric code, will be associated with the transaction instead of the 16-digit card number.
The original data cannot be deciphered mathematically through the token. To mitigate fraudulent activity, only the payment processor has access to the securely stored original data. If the tokenized payment data is stolen, fraudsters can't use it because the corresponding payment information cannot be ascertained.
Much like tokenization, encryption secures sensitive payment data. However, an encryption key is used instead of a token to encode sensitive information, meaning that a master key is generated using a mathematical cryptographic algorithm. After initiating a transaction, the customer data is unreadable and useless to cybercriminals without access to the master key.
The responsibility to protect digital payment data doesn't only fall on the shoulders of lenders; customers must also do what they can to secure their data. Lenders can educate their customers on best practices to protect themselves, including using strong passwords, setting up account activity notifications and using multiple identity verification methods.
Lenders should also train employees on best practices for maintaining security. They should conduct regular training sessions to keep them updated on the latest preventative measures, password procedures, how to identify potential scams and how to react in the event of a cyberattack.
Fraudulent charges and cyberattacks are always a concern for consumers and lenders. Thankfully, debit cards offer amazing features to combat fraud on loan payments. For transactions where the card is present, the signature, PIN verification or EMV® chip feature helps to reduce fraudulent charges. Additionally, when the card isn't present, for example, when making a loan payment online, via an app, or over the phone, lenders can have a sense of security knowing that PINs, CVVs (Card Verification Value), or AVS (Address Verification Service) are necessary to make the payment.
Security is one of the highest priorities in digital payment processing. If a data breach occurs, you want a payment processor that has taken all the necessary precautions to protect your company and customer data. REPAY implements many security measures to protect lenders and consumers against the unexpected, from tokenization and encryption to PCI DSS compliance. In addition, our payment solutions seamlessly integrate into your loan management system to drive cash flow, streamline payments and give both you and your customers peace of mind that all vulnerable information remains secure.
Offering your lending customers the convenience of digital payments doesn't have to be expensive or complicated. Contact us or request a demo to learn more about what REPAY can do for you.