If you’re a business owner, you have probably heard about the terms: Payment Gateways and Payment Processors.
They’re crucial in the payment chain and read-a-like as if they were the same thing. But they are not the same.
You will learn how different they are (and how dangerous it’s not to protect them correctly).
What do you say? Shall we?
What are the Payment Gateways and Payment Processors?
In the first place, we could differentiate online Payment Gateways as software tunnels that connect the product/service offering website to the money-transferring platform. They are the first contact point, so PGs handle the payment method (credit or debit card, for example).
Think in this way: Payment Gateways are there for when you proceed to buy a book online.
As a Mediator, they carry you through the step-by-step process, until you reach the actual money-sending to the book company bank’s account.
So, if that’s what a Payment Gateway is, what exactly is a Payment Processor?
It is the financial institution that works in the background. The same that drives the data of every transaction between the client, merchant, issuing, and acquiring bank.
An ideal Payment processor keeps data transferring instantaneous, and secure to end-users (out of cybercriminal hands). They also provide all equipment needed (cards and machines) to facilitate payments.
Is everything clear so far?
Alright, let’s see how all the dots connect.
How Do Payment Gateways and Payment Processors work?
In short terms, the payment gateway stays in front of your website, waiting for an order to take place, to deliver the client’s sensitive information securely. It encrypts it in a way the banking system of payment processors can proceed with it.
Still, it’s useful to see how everything works in 5 simple steps:
- A customer clicks on the “Buy,” “Submit,” or “Checkout” button on the website to place his/her order.
- The website or eCommerce store asks for the relevant bank or card information he/she will use to pay, to send it afterward to the Payment Gateway.
- The Payment Gateway re-directs the customer to a security page, asking for a “transaction authorization.”
- The Payment processor also receives such information, and send it to the issuing bank for approval or denial.
- Is everything correct? Is there enough balance to make the transaction? Then the Merchant’s Payment Processor notifies the customer that the order is placed. If the sale takes place, the merchant gets paid. If it doesn’t, the bank portal will let the customer know what’s wrong.
For what you can see, it’s evident that by selling products and services online, you’re treating it with highly-sensitive information. You should never manage Bank and card details uncarefully.
Have you asked yourself: “What if it gets caught by the wrong hands?”
Hacking Risks of Payment Gateways & Payment Processors
Digital payments are one of the biggest economy stimulators. But if you don’t treat them correctly, they can also be your worst nightmare.
Here’s a hard-to-swallow pill: debit and credit cards can be hacked. Even the most cautious and protective business has resulted in victims of it.
This is because a “100% secure” payment system doesn’t exist. It’s one of those life facts that you must accept and confront as a digital merchant.
But you can at least raise the stakes at your favor close to that 100% rate.
Do you want to know to avoid hacking risks of payment gateways and payment processors?
Let’s talk about the three possible sales system vulnerabilities that hackers seek to exploit.
After you understand how they work, we’ll also mention some countermeasures to protect yours and your customer’s data from breaching.
- Targeted attacks at Outdated systems: If you have used any payment processing software before, you have also seen an ongoing patch or update happen at any time.
It happens for an important reason: even the best software providers are vulnerable to bugs and leaks. And while this is entirely normal (it occurs to software companies like Microsoft). What it isn’t, and what you should keep an eye on, is when yours doesn’t update for hardware incompatibility, to mention at least one. - Remote access scams: Could you imagine what would happen if someone accessed your device while you’re navigating your banking platform? Scary, right?
Luckily, this is impossible. Or is it? I’m sorry for being who tells you that customer service representatives aren’t the only ones that use “Remote access” tools.
It’s surprisingly comfortable for a scammer to control your system through Social Engineering. - “Skimming” card data: Small devices can be installed on your point-of-sale hardware to steal valuable data that runs through it. They can be attached to credit card terminals as those from those ATMs and self-checkout stations to collect and later swipe off banking credentials.
I know. We are supposed to protect our customer’s from massive breaches and bankruptcy, but financial institutions themselves aren’t capable of doing so.
What type of solutions is at hand for us to protect payment systems from hackers?
How to Protect your Payment Systems from Hackers
Financial fraud is latent in the online and brick-and-mortar world.
But as conscious merchants that we are, we won’t let that happen anytime soon.
The good news is that you can maintain everyone protected with the right tools and knowledge. I guess you don’t want to lose it all due to an attack?
I bet you won’t like to receive a massive stream of chargebacks, fees, and fines.
So, there’s are different security options you can execute on and apply to as a Merchant.
- Do not keep banking or card details on your system. Handle everything through third-party companies since the very first moment. Why is that? They are fully equipped with all the measures needed to handle financial information like this.
- Scan Regularly for Vulnerabilities. As you might guess by its name, there are vulnerabilities scanner that checks for possible security holes on your payment systems. The remotely check your networks, applications, services, and devices that hackers could exploit at any time. And do not sleep on this: hackers find to seek vulnerabilities out every day, so the least you can do is to scan every 90 days.
- Keep Track of All Transactions. That would include all of the services and structure parts that form payment systems (firewalls, servers, and devices). Indeed, it would be a daunting task to check every part of it manually, so that’s why monitoring tools have been created to troubleshoot with ease and speed.
- Enforce and Verify all Data. There are several steps to be enforced here. First of all, permit only those login credentials that are strong and impenetrable enough. Password cracking isn’t new for anyone, and brute force attacks are persistent nowadays. Having a customer password management and recovery tool in place isn’t a bad idea either. Now, if you want to prevent any future fraudulent activity, keep your security system even more secure: Ask for Address and CVV information.
- Use Firewall, Tokenization, and Point-to-Point Encryption.
There’s no doubt about the importance of security practices around both payment gateways and payment processors.
Today’s goal with this read was to change the perspective from challenge to solution.
Everything keeps evolving, moving forward, and it will not stop because you do.
Being said, hackers do not stop either. So you can choose between being vulnerable or being unpenetrable.
Your client’s and end user’s peace of mind is on your hands.
Can you trust yours to MyITGuy?