What Does a Payment Gateway Do with Your Data?

Tag: encryption


What Does a Payment Gateway Do with Your Data?

A payment gateway is an essential element of online payment ecosystem. It allows businesses and consumers to carry out online payment transactions. While online merchants are not expected to have expert knowledge of payment gateway systems, it is still helpful to know about their mechanism so as to provide the best possible services to your clients. One of the most important aspects about a payment gateway is that it collects vital information about a business and its clients. It is important that the safety and security of such data is ensured. Following are some of the critical pointers about data handling by payment gateways.

PCI DSS Compliance: A payment gateway does not store the data in its original form. In order to provide the most secure form, the payment gateway should be PCI DSS compliant, which is the current gold standard when it comes to the security of data. The PCI Security Standards Council is a global organization which carries out the task of setting compliance rules with regard to the treatment of user data obtained during the online payment process. The current rules require the data to be encrypted for eliminating the risk of data interception. This implies that payment gateway never stores critical information such as CVV, password or pin. The information related to name, card details and address is only used for completing the transaction and is not stored.

Tokenization: Payment gateways also carry out tokenization of critical information. This implies that when you key in your card number, it is automatically converted into a single token. This token consists of a unique set of characters which replace the original card number. Using such tokenization, the payment may be processed without revealing sensitive details. As these token numbers are generated and assigned randomly, it is highly improbable that the original numbers may be retrieved by carrying out reverse engineering. There are different types of tokenization processes around, the main ones being format preserving and non-format preserving. Generally, non-format preserving tokenization is considered to be the safer option.

SSL Certification: As important as the PCI DSS compliance is, it is equally important to ensure that the websites are also securely configured. The payment gateways generally use SSL certification which secures the data using TLS encryption. Such certification may be verified by looking at the URL in the browser. If the website bears https:// protocol then it means that it is secure. This is especially important for ecommerce companies and websites so as to make sure that the integrity of consumer data is maintained.

Fraud Screening Tools: Most of the payment gateways offer you fraud screening tools which may help you in reducing the risk of payment frauds. Some of the most prominent tools used for this purpose are Address Verification Service, Card Verification Value and Card Code Value. With the use of these tools, the risk of online payment frauds may be curtailed to a large extent. A payment gateway endeavors to provide a secure channel between a business and its customers for enabling online transactions. It is important that proper measures are taken by such payment gateways to ensure the safety of critical data of all the parties involved.

Additional Measures: Websites may also use additional tools such as the use of the hash function for making the transactions more secure. Under this function, a signed request from the merchant is required for validating the transaction. Such signed request is a code and is known to only the payment gateway and the merchant. For further security of the transaction and the data, the IP of the requesting server is also authenticated, so as to filter out any malicious activity. Some payment gateways also use Virtual Payer Authentication (VPA), which is a 3D secure protocol. This step adds an extra layer of security, enabling online clients to authenticate each other, and thus adds to security measures.

Overall, several new tools and methods have evolved to increase the security factor of online transactions. While selecting a payment gateway, a business should take proper cognizance of the security measures taken for maintaining the secrecy of critical information pertaining to the business and its clients.

Payment security lingo: What’s point-to-point Encryption

Payment security lingo: What’s point-to-point Encryption

One of the biggest threats to online security comes from data breaches. Such breaches have now become mainstream and it is now very important for the companies to save their data from such infringement. There are several new technologies and tools available for securing the data belonging to the business and its clients.   One such important tool is Point to Point encryption or P2P encryption, as it is popularly known. It is especially important for businesses which accept online payments through different modes including debit cards and credit cards.

What is P2P encryption?

P2P encryption refers to a standard established by the PCI Security Standards Council. The main aim of this standard is to ensure that confidential data pertaining to debit and credit cards are instantaneously into unbreakable codes. Such coding is important to ensure that the data is protected against fraud and hacking. The standard is designed to provide optimal security of payment process and data for online card transactions.

The P2P encryption Standard enumerates the requirements to be fulfilled by an online payment solution to qualify as a PCI validated P2PE solution. These requirements pertain to a complete set of software, hardware, decryption, gateway and device handling etc. The final decision in this regard rests with P2PE Qualified Security Assessors, who are independent third party entities with requisite qualifications to make such assessment. It is important to note that only ‘solutions’ may be validated and not individual units of hardware. If a payment solution does not meet the requirements for being validated as P2PE solution but offers similar type of encryption then it may be accredited at End to End Encryption Solution.

How Does it Work?

P2P encryption works using a number of secure applications, devices and other related processes. Whenever a business swipes a debit or a credit card, it initiates an interconnected series of actions. The point of interaction device, which is used for swiping the card, encrypts the information immediately. If the device is PCI validates then it uses an algorithm for the purpose of encryption. These encrypted codes are then sent to the payment processor or payment gateway, which decode the information. The main requirements for setting up a PCI P2P encryption system include the secure management of encryption devices as well as decryption devices and the proper upkeep of decryption environment.

It should be noted that coding and decoding keys are not provided to the merchants. They are given a unique token number to identify particular transactions so that they can keep proper records and issue refunds as and when required. However, merchants stand to gain a lot from this process. They are assured of the safety and security of their transactions. Their business is protected against card frauds, which in many cases lead to heavy financial loss. The merchants are also able to improve their turnover by assuring the customers about the safety of their data and payments.

P2P Encryption vs. End to End Encryption

For P2P encryption, there are certain features which are unique to this protocol. The solution offers hardware to hardware coding and decoding where POI device comes with Secure Reading and Exchange of Data function. The solution is also required to be validated for the PCI P2PE Standard. For this purpose, the solution should fulfill the requirements such as temper evident packaging, shipping and installation. Such solutions also come with instructional manual to guide merchants about device use and storage.

End to End encryption, on the other hand, does not unencrypt the card details between the two terminals. It secures the data provided the endpoints are offered by PCI accredited organizations.

The Benefits

P2P encryption is important for the development of ecommerce and online businesses. Many customers are not inclined to make online transactions due to the fear of data breach and financial losses. By providing P2P encryption, the businesses can assure their clients that their financial data will be secure. This can help in increasing the revenue for the business, adding to the bottom line. All leading payment processors now offer P2P encryption to ensure smooth and safe transactions.