How Payment Service Providers Are Going Above And Beyond For Merchants

Payment service providers and merchant services make it possible for merchants to take payments and receive funds from customers. Once upon a time, when everyone paid in cash, banks payment service providershandled everything.

Times have changed and the number of payment options that exist are numerous and growing. Banks are still involved of course, but now several layers of service providers play important roles in the processing and transferring of funds between customers and merchants.

Anyone new to this complex ecosystem of competing and partnered service providers might wonder why it exists? Security. High on the list of anyone already working with payment service providers (PSPs), payment gateways and processors, is security concerns. For the customers, for banks, for card issuers and ultimately, for merchants.

You must be vigilant with every transaction. Every transfer is open, in many respects, to the same risks of theft as physical currency transactions. Criminals are far more sophisticated, which is why you need a payment service provider willing to go above and beyond to protect your business, your customers and transfers from card issuers and merchant acquirers. Here are a few ways some PSPs are going the extra mile for merchants.

Payment Provider And Merchant Services Are Going The Extra Mile

#1: Shifting data protection burden to themselves

Every merchant, retailer and e-commerce brand in the UK and Europe, are soon going to need to be ready for GDPR (the General Data Protection Regulation), which comes into force on 25 May 2018. GDPR replaces current data protection legislation, which comes with, amongst other things, much larger fines in the event of a data breach.

Unlike merchants, especially smaller retailers and e-commerce brands, payment service providers (PSPs) are in a much better position to fortify data collection and processing functions. Many merchants don’t have the expertise or technology, or relationships with hosting and other technology companies to safeguard customer data and payment details to the same extent as PSPs. Now is the time to ensure you are working with payment companies that take data security seriously and will shoulder more of the burden for protecting your customers from cybercriminals.

#2: Consistent checkout improvements

Slow, inefficient checkouts are one of the main reasons customers abandon carts.

With cart abandonment rates still around 69%, merchants need to do everything they can to ensure customers go through the checkout successfully. However, since most merchants don’t modify the checkout systems they are provided, the burden is on the PSP to ensure the user experience is smooth, efficient and secure.

In practice, this means working with a payment provider who can provide customisation when needed and will constantly test and improve the ‘off-the-shelf’ checkout for clients. Integration with emerging and newly popular alternative payment methods are also important.

#3: Comprehensive PCI DSS compliance

For most merchants, achieving Payment Card Industry Data Security Standard (PCI DSS) compliance is not straightforward. Most aren’t fully clear what this means or how they will achieve compliance.

PSPs need to focus on attaining the highest level of compliance possible (PCI DSS-Level 1), which in turn will benefit merchants and reduce the risk of fraud and data breaches. All payment ecosystem providers want to achieve Level 1 compliance, but working with a company with that level of accreditation is the only way to ensure your customer’s payment details are as secure as possible.

#4: Preventing physical data security breaches

Cyber safeguards are essential as cybercriminals are getting smarter.

But what about data centre physical security? It’s no good knowing you are working with a payment provider with a highly secure firewall and other prevention methods, only for the data centre they use to be the weakest link in the chain. It is worth asking questions. What physical security is on-site? What about fire suppression? What about backup power supplies and batteries?

Some government and military data centres now use armed guards and armed response. For some merchants, this may be a step too far. But with physical breaches on the rise, it makes sense to ask every payment provider and other third-party providers in this ecosystem about data centre security.

#5: Transaction tokenisation

Tokenisation is one of the most effective ways to combat cyber threats. Once the data is encoded, all anyone would get if they were to breach security, would be data tokens. Not card details. Cybercriminals would have gone to the trouble to steal data that is worthless, which means the risk of a data breach is minimised, therefore making it easier to argue against data protection fines.

In this high-risk operating environment, you need a payment provider that puts your needs first, who looks after your customer data and who is willing to go the extra mile to prevent data breaches, brand damage and costly regulatory charges.

If you have any concerns about the security of your business’ online payment processing, contact our team for impartial advice.

Download our whitepaper on Fraud Solutions For Ecommerce Businesses here.