The payments industry ecosystem has changed drastically in the last decade, with businesses and consumers switching from cash & checks to online payment methods. The COVID-19 pandemic has accelerated the adoption of digital payments, with lockdowns & restrictions, and ongoing public health concerns disrupting daily life in ways that heavily impact spending trends and consumer habits.
At the same time, consumer concerns about the safety of e-payments are also on the rise.
Data also shows that more than half of small businesses are worried about fraudulent customer payment transactions increasing risk. They also consider it as a potential barrier for attracting more potential customers from buying their products online.
That’s why, as a business owner, it is critical to provide the most secure online payments for your customers.
This article has everything you need to know to enhance your current online payment system.
5 best secure online payment solutions for small businesses
1. Credit cards
Credit cards have the most extended history of use for online payments, and they are backed by some of the world’s most powerful financial organizations. These institutions follow stringent data security requirements, and each country has its own data protection laws. The Fair Credit Billing Act, for example, protects credit card consumers in the United States. This federal law protects them from illegal or erroneous transactions, stolen cards, undelivered items, and other types of fraudulent activities.
Credit cards use online security features and payment authentication such as SMS verification, data encryption, tokenization (a process of replacing sensitive data with non-sensitive data), and 3D-secure (an additional verification step with the card issuer) to keep your accounts and personal information safe.
By and large, credit cards are an easy, secure, and safe payment method to use for online shopping.
2. Bank to bank transfer
You & your business can also request customers to pay directly through a push payment from their bank account. This is a standard payment method for large transactions that need to be transferred manually. It makes customers feel more secure by giving them control of payment. Yet, they need to manually input their details, which is cumbersome and time-consuming and can lead to errors.
If you want to remove the risks of credit fraud entirely, a great online payment example for this is Stripe.
Stripe is one of the most popular payment options on the market today due to its versatility.
It’s simple to use, has no monthly or membership fees, and provides a safe shopping experience. It’s ideal for eCommerce stores, subscription services, and on-demand marketplaces. Setting up recurring payments is never easier with the help of Stripe.
If Stripe is your perfect online payment solution, make sure you sign up for AccountDock as well. AccountDock is a powerful billing history app for Stripe. It allows your customers to access, view & generate PDF files of their receipts and past payments right from your website.
One of the top features of AccountDock is analyzing failed payments. Failed credit cards happen from time to time with online payments. AccountDockhighlights unsuccessful payments and provides extra information such as why the payment failed, how many times the charge was tried, and when the next attempt will be made.
Sign up to try AccountDock for free!
PayPal is a similar payment method to Stripe. While Stripe is perfect for incorporating payments within your own platform, Paypal is a better choice for the international market. PayPal has more than 300 million users from 202 countries and territories all over the world.
PayPal is designed to be safe for both buyers and sellers. As long as the network you’re using is secured, all information transmitted between your device and PayPal’s servers is secure and encrypted. For example, when your customers make online payments to your business, their card details are managed solely by Paypal to keep them safe and private. That being said, your money can be on hold for up to 21 days (or longer) for security purposes.
Plus, any eCommerce sale via Paypal in the US will cost you 2.9% + $0.30 per transaction. At the same time, it’s a bit more expensive for international sales, with 4.4% per transaction, plus a fixed amount fee depending on the country the purchase came from.
5. Google Pay
You can use Google Pay for your company to accept online payments more quickly, easily, and securely. With an enhanced security platform – “Google Pay Shield,” Google Pay will give you and your customers 24/7 security to help detect fraud, prevent hacking, and verify identity.
You may add the service to your online store using the Google Pay API. To use the Google Pay API, you must first apply for a Google Merchant ID and be authorized by Google. However, this takes some technical expertise, so if you’re not comfortable dealing directly with the API, you may discover online POS systems that integrate with Google Pay, including top names like Shopify, Checkout.com, and Stripe.
10 practices to provide the most secure online payment process for small business owners
Alongside a reputable and trustworthy online payment solution, business owners should also employ the following ten practices to build a safe and effective online payment system:
1. Matching billing address information
A billing address is associated with a certain payment method, most commonly a credit or debit card. Companies use the billing address to validate the authorized usage of a credit card. It is also the place where businesses mail paper invoices and bank statements.
One of the most frequent techniques of online payment security is the address verification service (AVS). Almost every processor uses it since it is simple to implement. The purchase will be completed if the billing address you supplied matches the one on file with your credit card issuer. Though it can’t eliminate all fraud, it dramatically reduces the likelihood of a fraudulent charge being approved.
2. Make your website look trustworthy
Not only should businesses invest in cutting-edge technology to make your payment process secure, but you also need to pay attention to your website’s interface. Your site’s appearance plays a vital role in deciding if your consumers feel it is trustworthy for making a purchase.
As ambiguous as the practice may sound, we list the best five tips below on how businesses can provide a trustworthy and secure site environment for their websites.
- Clear & directly associated with your product’s domain name (web address)
- Choose a reputable and recognisable domain extension, like .com, .org, .store, etc.
- Proper Google advertising placement. Less is more!
- Trustworthy and well-written content/blogs
3. Allow payment without an account
Some businesses require consumers to create an account to buy their products or services. While they believe it’s an easy way to promote their goods and deals, customers, on the other hand, tend to view it as annoying and invasive. Besides, when your customers have to give their personal & unnecessary data to make payment, it makes them cast wary eyes on your business. They have no idea whether their information would be secure or, by any chance, your business might sell their data to a third party. Simply put, nothing good comes from requiring your clients to create an account.
The best way is to create projects like loyalty programs to encourage your customers to sign up.
4. Require strong passwords
If your customers do want to create an account on your site/app, make sure to implement a strong password policy.
Strong passwords should be your first line of defense when it comes to securing your company’s data and customer information. However, many businesses have weak or no password policies, placing them in great danger of data hacking. Cybercriminals attempt to access user accounts using weak and guessable passwords: names, birthdates, phone numbers, etc.
5. Provide shipping details before payment
Before your customers click the pay button, they want to know the delivery fees and the expected arrival dates. It shows that your business is 100% transparent in any occurring fees and willing to present them clearly to your customers before any payment. If only after your customer buys your product would they know they have to pay an extra fee for delivery, it’ll leave an unpleasant taste for them. That leads to customers feeling doubtful and skeptical because of insufficient delivery information; they may just cancel the purchase to be sure.
Providing your customers with detailed shipping information not only makes them feel more trust for your business, increasing customer satisfaction but also steers clear of any unwanted disputes with your clients.
6. Comply with the standards of PCI
PCI (Payment Card Industry) compliance is the most crucial security consideration, as failure to follow these protocols may result in legal troubles. This organization is responsible for setting security standards for electronic payment processing.
It is important to note that obtaining compliance on your own is a complex undertaking that can take weeks. You must submit the application and be ready for the lengthy and costly process. That is why most merchants choose to work with payment providers such as Stripe to simplify the process.
After all, to stay PCI compliant, businesses need to conduct continuous & substantial assessments proactively. It’s a good idea to check & update your PCI validation method as when your business grows, compliance requirements will also change.
7. Install an SSL certificate
One of the most crucial steps for your payment security is implementing an SSL protocol on your website. It encrypts data going through the site, such as credit card details and sensitive information that customers share during the checkout procedure.
Once the SSL certificate is installed, internet browsers will show a padlock next to your web address that begins with HTTPS, telling customers that your website is protected and safe to use. This helps you build an online reputation, raises brand awareness, and reaffirms your legitimacy.
Besides, if your website doesn’t have an SSL certificate, your visitors’ browsers will flag your website as “not secure.” Even if there is no security concern, it just doesn’t look good to your viewers. It will impact how many sales you make on your website, as well as your Google ranking.
8. Use Strong Customer Authentication (SCA)
Strong Customer Authentication (SCA) is designed to reduce online credit fraud. It’s a regulatory requirement in the EU.
SCA verification procedure establishes a three-layer authentication technique. This means when your clients buy something; their payment will most likely go through at least two of the following three layers of security:
- Knowledge (PIN or a password)
- Possession (smartphone or a token)
- Inherence (a fingerprint or face recognition)
9. Implement 3D Secure
3D Secure is an authentication mechanism that prevents unauthorized card usage and shields eCommerce retailers from chargebacks in the case of a fraudulent transaction. When a client makes an online purchase, 3D secure adds an extra layer of verification managed by the cardholder’s bank.
For example, if a client uses a Visa card to buy a product from your website, Visa will handle the final authentication test. Entering PINs or employing biometric scans are examples of these tests. Because the card-issuing bank performs the exam, you can’t choose which test to do. This additional layer of online payment security ensures that the person using the card is the person to whom the card was issued.
10. Keep up with the latest fraudulent trends
It also helps to stay current on the latest forms of fraud. With businesses increasingly transacting online, fraudsters are constantly devising new and lucrative ways to access, steal, and exploit private information.
It’s in your best interest to remain up to date on the newest types of fraud impacting other businesses worldwide so that you can install the appropriate protection to safeguard your business against them.
There is no foolproof way to prevent payment fraud. However, by proactively taking appropriate and timely measures, you can minimize potential risks and ensure that your organization has the best online environment to thrive.