When it comes to making payments online, three criteria have to be met, safety, speed, and cost. Most online payment systems are great, but they can be rather expensive, while others are slow and still use outdated security. Luckily, we live in an era where new technology is being developed each day and there’s always something exciting around the corner.
In this segment, we’ll be taking a look at the inner workings of online payments and security, the technology behind them, and much more.
Innovative Technology for Online Payments
Technology is often developed to keep up with current market changes and general consumer trends, and living in a society that demands fast and secure financial technology has opened the market to new and innovative concepts.
With technology that features network tokenization which replaces the original card number with a token each time it’s used. It’s a simple, yet effective concept that works very well to secure payments. Furthermore, if the data were to be stolen, it would be useless to cybercriminals, it’s somewhat similar to SSL data encryption, but not to that degree.
Another great innovation regarding online payments is Strong Customer Authentication; this is a simple concept that requires those making payments online to verify whether it’s them. This prevents fraud and family members from making online purchases while using your credit card. Especially when shopping online or making deposits on online gaming sites this is a crucial element.
We’re also dawning on the era of living in a cashless society where we’ll be using methods such as QR payments, digital wallets, contactless cards, and mobile phones. Most governments are even realizing the potential of the financial tech market and there’s a lot to look forward to regarding these concepts.
How do Online Payments Work
Most of us make online payments regularly, but do you understand how they work? The payment cycle isn’t very complicated and we’ll be happy to explain it. It starts with the customer submitting an order to a merchant, during this period, the customers’ funds are being validated by their respective card association to ensure that they have the right amount to make the payment.
Once this process is complete, the merchant sends the data to a payment processor which goes via a payment gateway. Once the payment has been confirmed by the payment processor, the payment is settled and the funds are transferred into the merchant’s bank account. While this process can sound a bit complicated, it isn’t. Think of it as a message being sent amongst a group of people, with someone constantly returning with information regarding what the other person said.
Online payments have become a part of everyday life, and there is more than one variation. It can be done with a debit, credit, and prepaid card, along with eWallets and eChecks.
Systems That Ensure High Security Standards and Quick Processing
Online payment security is as important as the payment itself and there are a variety of security systems in place that ensure your payment is secure. SSL encrypts information and this means that if it falls into the wrong hands it will be rendered useless to the thief. PCI is a necessity for those who spend a lot of time making online transactions, there are plenty of payment providers that adhere to the standards of the PCI; however, data encryption is required.
One of the most popular and secure payment methods available is the eCheck, a known classic dating looking back on a long payment history with a solid reputation. As it’s a 4-step system that’s very secure. EChecks pass through an ACH network; this means that the funds are being drawn from an account rather than being pushed into one. These payment methods are not only used by those who enjoy online gambling and offered by most operators in the industry, but it’s also used by government agencies and telecommunications companies. EChecks are similar, yet completely different from traditional paper checks as they’re much more secure and go through fewer steps to be processed, this results in shorter processing timeframes and that’s one of the reasons why they’re so popular in Canada.
There are a variety of methods that are used to secure data and online transactions; however, it’s almost impossible to completely prevent fraud. The best thing you can do is ensure that you’re always using a reputable financial service that follows strict financial safety protocols.