As payment trends move away from cash and towards online financial transactions, the use of third-party payment (TPP) providers is set to grow. Yet their increased use brings greater security risks. Because putting payment information in documents in the cloud is a big risk, making sure your information security management system is properly screening and protecting your payment methods is crucial to maintaining your operational security.
What is third-party payment?
Third-party payment refers to the use of online payment methods. This type of payment option allows people to make online purchases from an online merchant using their credit cards. Whereas in the past, people were more likely to use cash or debit cards for their purchases, the inclusion of third-party payment is set to change the payment landscape. This is because the use of third-party payment is also a form of transaction security. At the heart of a security system is the need for an ongoing strategy to monitor and evaluate a situation. This is called a Risk and Compliance Management process. With third-party payment, online retailers are now more susceptible to online fraud. Putting payment information on a document can be a huge risk without a properly functioning ISMS.
Security risks of third-party payment
Trusted third-party providers can hold your credit card information, store personal and financial data or even process the transactions on your behalf. They can also use extra security measures to protect sensitive information, often in partnership with independent agencies. In many cases, consumers can create accounts and links to banks and credit card companies. Most of these providers are approved by credit card companies and financial institutions to process payments on your behalf, and their code of conduct is drawn up with their aim to protect both customers and their merchants. For example, PayPal has a ‘fraud and security shield’ with credit card companies, which protects transactions against unauthorised transaction and payment compromises. Other companies, like Netkiller, have an ISO 27001 certified ISMS, which signals that a third party has objectively audited the company’s information security management system.
Prevention of security risks
The fundamental security issue facing TPP providers is the possibility of being hacked. In 2013, PayPal became the victim of a huge data breach in which up to 143 million customers were exposed. The full extent of the breach was only discovered during the course of an investigation by the Federal Trade Commission. The most important security feature of TPP providers is the encryption of sensitive information. You only have to look at the recent data breaches at banks to see how exposed and exploitable banking information is. As TPPs get more and more popular, the likelihood of these breaches increasing will only grow. The main function of your TPP is to store personal information, and you should be aware of how and where they store it.
While not as prevalent as the devastating data breaches of 2016, IT security vulnerabilities remain an important concern for businesses across all sectors. Even organizations with a highly-focused corporate IT security management program can be vulnerable to phishing emails and social engineering. To protect your business and assets, be proactive and take proactive measures to create a safe and secure payment environment that is inclusive and transparent to all parties. This will go a long way to ensure that your IT security risk management program delivers on its promises.