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Payment security is a foremost concern for many online retailers. More secure payment options prevent fraud, reduce chargebacks, and improve consumer confidence in the purchase process. This not only improves the risk profile of a business, but also improves their profit margins and keeps their customers happy. It can be tough, though, for merchants outside of the tech field to understand which payment methods are more secure and what makes them that way.
In this guide, we will go over the most common secure payment methods for online transactions:
- ACH/eCheck payments
- Credit card payments
- Mobile wallet payments
Let’s dive into each, and how they affect the material outcomes that add value for both merchants and customers. Then, we’ll tackle how to make every payment method you provide more secure.
Secure Payment Methods for Online Transactions
ACH/eCheck, credit card, and mobile wallet transactions are the three most common payment options available for online merchants. Each offers differing levels of security and benefits, but they aren’t all equal. The balance that merchants tend to struggle with, though, is the tradeoff of transactional friction for security. More secure payment options tend to also take more effort for the consumer, and the table below outlines how:
It’s a complicated payment landscape, and unfortunately, it isn’t as simple as picking the “most secure” option and running with it. While ACH/eCheck is extremely secure and hard to charge back, it also takes a lot of work for consumers and requires cash on hand to complete a transaction. This can drastically reduce sales if it is your only payment option. Credit cards may be widely used enough to be your only payment option, but it also makes chargebacks so easy that “friendly fraud” (frivolous chargebacks on totally secure and legitimate purchases) has become a norm in many high-risk industries. Mobile wallets may offer a great balance of security and low friction, but they require customers to set them up and understand how to use them, and not enough people use them as a primary payment method for them to be used as a sole payment method.
As a result, it is best to pick a payment processor that can offer a mix of two or three of these payment options. Not only that, but merchants should also seek out payment providers that know how to improve security across all available payment methods, ensuring that their client merchants and their consumers can transact with confidence.
How to Improve Payment Security
There are a few different ways to improve security, regardless of the payment method you use:
- Leverage 2-factor authentication
- Improve your fraud protection and chargeback management
- Seek out payment processors that use stringent security protocols
Leverage 2-Factor Authentication
2-factor authentication essentially means that a consumer will get a text, email, or push notification giving them a code or a button to tap that confirms that their payment method is being used legitimately. These usually have to be offered by the bank or credit card provider, but merchants can also require 2-factor authentication as a security redundancy to keep customers accountable when they charge back.
Improve Fraud Protection/Chargeback Management
Fraud and chargebacks are the primary incentives for businesses to increase payment security. Businesses can improve their fraud protection and chargeback protection by paying more staff or a third party to handle disputes and ensure that consumers can’t easily take advantage of them. Businesses can also simply choose a payment processor with advanced fraud and chargeback protection measures so that they don’t have to worry about it.
Seek Out Payment Processors With Stringent Security Protocols
On the more technical side are the consumer data protection and liability externalities involved with online payment processing. Premium payment processors use top-of-the-line PCI DSS security protocols to protect against security breaches that can harm customers and expose your business to excess liability. Make this your bare minimum expectation for your merchant account.
Secure Payment Processing with Seamless Chex
Seamless Chex is an experienced high-risk payment processor that specializes in purpose-driven features like chargeback management tools and fraud protection. Our 99.1% approval rate and comprehensive high-risk industry list mean businesses of nearly all industries and sizes can be confident in our support. We work to truly understand your business from the outset, with upfront underwriting and individualized payment schedules designed to work for each client’s market and business cycle.
To learn more about secure payment methods for online transactions, contact us today.
