How to protect your business when taking online payments

In today’s digital-first world, businesses increasingly rely on online transactions to cater to modern customer demands. But with the convenience and accessibility of online payments comes the looming threat of potential fraud and security breaches.

Recent projections suggest a staggering increase in online payment fraud, with global losses forecasted to $362 billion from 2023 to 2028.1

That’s why it's critical for businesses to step up their security efforts to protect both their finances and their shoppers’ data. Explore practical strategies to help minimize the risks associated with online payments.

What is online payment security and why is it so important?

Online payment security references the measures and protocols put in place to safeguard online transactions and protect sensitive financial information from unauthorized access, fraud, and other malicious activities like data breaches.

Without adequate online payment security measures, businesses may be at risk for:

  • Financial losses. Businesses may be vulnerable to financial losses due to fraudulent transactions, chargebacks, and potential legal liabilities.
  • Operational disruption. Fraud incidents can disrupt business operations, causing downtime, productivity loss, and additional costs associated with remediation efforts.
  • Legal issues. Non-compliance with industry standards and regulatory requirements, such as Payment Card Industry Data Security Standard (PCI-DSS), can result in penalties, fines, and legal consequences for businesses.
  • Reputational damage. Security breaches and incidents of payment fraud can tarnish a business's reputation, eroding customer trust and loyalty.

In addition to impacting a business, compromised payment security poses a threat to customers who entrust their sensitive information during transactions. Data breaches can lead to identity theft, unauthorized charges, and other forms of financial fraud.

Get an introduction to online payments.

What are the risks involved in taking online payments?

Operating in online payment systems comes with its share of challenges, including potential fraud, data breaches, and chargebacks, all of which can affect a business’s finances and reputation.

There are several different risks of online payments. Here are some common examples to be aware of:

  • Fraudulent transactions. Fraud can occur through various methods, including stolen credit card information, identity theft, account takeover, and card-not-present fraud, where a fraudster makes a purchase without physically presenting the card.
  • Unauthorized access. Hackers may exploit vulnerabilities in payment systems or network infrastructure to gain unauthorized access to payment data.
  • Chargebacks. Chargebacks initiated by scammers occur when legitimate transactions are disputed to obtain a refund while retaining the purchased goods or services, resulting in financial losses for sellers. They can be costly and time-consuming for small businesses, as they often require extensive documentation and evidence to prove the validity of the transaction and contest the chargeback.

To navigate through these challenges, businesses should stay vigilant and put strong security measures in place to keep their operations as safe as possible. Explore more risk management solutions.

How can you take payments online more securely?

While online payments pose risks, there are ways to effectively manage and mitigate them. Explore how you can take control of your online payment security to help lead to smooth transactions and peace of mind for both you and your customers.

Help reduce risk with a more secure payment system

Increasing payment and website security can help prevent criminals from exploiting vulnerabilities and harming your business. This may involve some key practices:

  • Secure customer data. This includes not only payment information but also personal details and any other data collected during transactions.
  • Maintain an SSL certificate. Implementing and maintaining an SSL certificate encrypts data transmitted between your website and your customers' browsers, helping sensitive information remain confidential during transmission. Without SSL encryption, data can be intercepted by hackers, potentially leading to breaches and unauthorized access to customer data.
  • Keep back-end systems up-to-date. Regularly updating your website's back-end systems, including content management systems, plugins, and server software, can be helpful. Hacks may occur due to unpatched vulnerabilities in the software a website uses.
  • Implement a secure payment system. By prioritizing security measures such as encryption, multi-factor authentication, and regular software updates, a secure payment system may reduce the likelihood of fraudulent activities and data breaches.

Help protect your online transactions with built-in risk management

PayPal offers robust security products for businesses, including built-in risk management tools and compliance. Its platform can:

  • Help businesses meet global compliance standards like PCI SAQ-A and PSD2
  • Get additional security insights with Fraud Protection on eligible transactions
  • Get Seller Protection for eligible PayPal payments transactions2
  • Optional Chargeback Protection to help reduce fraudulent costs and more3
  • Verify transactions with two-factor authentication through 3D Secure

With seamless payment processing and comprehensive security measures, PayPal helps businesses to securely manage transactions and protect sensitive data. By leveraging PayPal's trusted platform, businesses can streamline operations, expand their customer base, and stay ahead of evolving security threats, all while maintaining compliance with industry regulations. Learn more about checkout solutions with built-in risk management.

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