Most merchants today realize the importance of processing payments online. In fact, statistics show that in 2012, online retail payments reached 7.4% of all retail transactions – $318 billion. And with the growth of E-Commerce comes a growth in the potential for fraud as well.
A recent Javelin study shows that online transactions, especially card-not-present (CNP) are a means for criminals to steal consumer credit card data, resulting in over $21 billion in consumer fraud losses in 2013.
As consumers, most of us have been a victim of fraud, and no matter the scale of severity, we all remember the sting. There are many ways consumers can prevent or minimize the risk of fraud, but for merchants, a data breach can be the death of their business. Businesses thinking about or currently processing payments online need a secure and consistent way to provide customers the option of using plastic, and one way to ensure data security is with the tools provided through a payment gateway.
Payment gateways authorize payments for retailers in all business categorizations. They have the ability to ensure that sensitive information, such as credit card numbers, entered into a virtual terminal or on an E-commerce website are passed securely from the customer to the merchant and from the merchant to the payment processor.
In the series of articles authored by Bluefin Payment Systems and featured on GoSmallBiz, founded by Fran Tarkenton in 1997, the benefits of a payment gateway are discussed. Take Bluefin’s payment gateway, PayConex, for example. So with PayConex, merchants get credit/debit/ACH processing on a virtual terminal, on a mobile phone, or in person. But all of these typical processing functions are backed by some very cool security features, including:
- Point-to-point encryption (P2PE): This function encrypts magnetic stripe (track data) and the credit card number at the point of entry using a secure device, reducing PCI compliance scope for merchants.
- Transaction tokenization: Allows a merchant to perform reissues, refunds, returns, voids, and recurring billing without the need to store the card number – i.e., the card becomes a token and numbers are not in the clear.
- Transparent redirection: Merchants can process credit card and ACH authorizations via the Internet without ever having cardholder (and ACH) data traverse your system.
So if you are a merchant interested in processing online, make sure you learn about the ways that a payment gateway can help you prevent fraud and protect your consumers.