5 Best Practices for Secure Payment Processing in Applications
Build a trustworthy payment system for your app by taking the right precautions: using MFA, following PCI DSS guidelines, integrating fraud detection tools, and more.
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Secure payment processing is vital for ensuring customers can shop safely on your app. Cyberattacks become more frequent each year, with a particular emphasis on stealing financial information. Luckily, you can implement a few best practices to simplify security and protect your clients’ data.
1. Use Multifactor Authentication
Multifactor authentication (MFA) is one of the top methods for securing payment systems today. It involves verifying the customer’s identity using a secondary confirmation method. For example, people can verify a legitimate payment attempt by entering a one-time code sent to their verified phone number.
While MFA isn’t foolproof, it can go a long way toward preventing unauthorized payments in your app. For instance, if a customer’s password or credit card is stolen, their account will remain safe since no charges can go through without the secondary confirmation method.
MFA is also user-friendly, so you won’t need to worry about inconveniencing customers. You can even use various secondary authentication methods. For instance, surveys show that 74% of consumers trust biometric authentication most, followed by PIN codes. Depending on the nature of your app and your user demographics, you could allow people to scan their fingerprints or face to verify a payment.
2. Integrate Existing Payment Systems
Secure payment processing doesn’t need to be complicated. Sometimes, the easiest solution is to use a system already tried, tested, and ready to go. Rather than building your own from scratch, you can integrate a third-party API, such as PayPal, Venmo, Apple Pay, or Google Pay.
These preexisting payment systems have a few benefits. First, they’re easy for customers to use. Most shoppers already have an account on at least one of these platforms. Additionally, the developers behind PayPal, Venmo, and other major payment systems have teams of security experts. They’ve already committed hundreds of hours to strengthening their safety features.
Even if you or your company do not have access to high-level security expertise, you can still get a strong minimum level of payment safety. Plus, the developers of existing third-party APIs can often provide technical support if you need help integrating their system into your app or website.
3. Follow PCI DSS Guidelines
Complying with certain regulations is often required to legally process payments, but they can also provide helpful guidance. One great example is the Payment Card Industry Data Security Standard or PCI DSS.
The PCI Security Council is not a legal entity but a professional organization formed by the United States’ leading credit card companies, including Visa, Mastercard, and others.
The PCI DSS is considered one of the top standards for online payment systems. It includes all the minimum security measures payment systems should have, such as encryption, user identity protection and more. Anyone can access PCI DSS guidelines for free through the PCI Security Council’s resource library.
With cyberattacks increasing yearly, utilizing every available tool is more important than ever. In 2022 alone, there was a 57% increase in attacks in the United States. You can defend your app and customers from these incidents using guidance from payment security experts. The PCI DSS is a great place to start and getting certified for complying with it can strengthen trust.
4. Integrate Fraud Detection Tools
It may be worth investing in advanced fraud detection tools if there is a significant concern about fraudulent payments on your app. Many security monitoring applications are designed to help businesses block unauthorized transactions. Some companies use these tools all year while others only need them during high-traffic periods, such as holiday shopping season.
Fraud detection tools automate the process of investigating and verifying payment attempts. For instance, AI monitoring can autonomously compare a customer’s IP address to their known geographic location to detect a potentially stolen credit card. Many banks and credit card providers are using AI to monitor their customers’ accounts with this strategy.
Investing in AI fraud detection tools can be expensive, but it's worth considering if it is feasible for your team. This is particularly true if you often process large or sensitive transactions that are more vulnerable to fraud.
5. Utilize Encryption and Tokenization
Sometimes secure payment processing is all about going back to basics. Encryption and tokenization are two crucial tactics that should be at the foundation of any security plan. Both techniques are used to protect customers’ identities and payment information.
Encryption hides payment information by making it illegible to anyone who does not have the decryption key. Encrypted data is effectively useless to hackers. Someone who intercepts a payment during transit or hacks into your app’s servers won’t be able to use customer information.
Tokenization is often used with encryption to protect customers’ identities. It converts data into a token, a string of random characters. A customer’s name might be disguised by converting it into a token. This strips payment information of identifying characteristics, making it much more challenging to use if a hacker intercepts it.
Protecting Customers’ Payment Data
You can build a secure, trustworthy payment system for your app by taking the right precautions. The easiest strategy for some developers is integrating third-party payment APIs, such as PayPal or Venmo. Utilizing payment security standards, multifactor authentication, and fraud detection tools is also helpful. Implementing these techniques lets you protect your customers’ data so they can shop safely.
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