Each time you purchase a product with an electronic payment method, a silent verification takes place. It happens nearly instantaneously to determine whether that transaction was legitimate or if it’s fraudulent. Ultimately, which is the purpose of payment authentication.
Payment authentication does two primary things. First, it blocks fraudulent transactions and second, it establishes confidence with customers when they make purchases. All so that the checkout process continues to be quick and easy. Customers don’t pay attention to payment authentication if it works. If it doesn’t work, then merchants are left to deal with fraud, chargebacks and lose revenue.
What is Payment Authentication?
Payment authentication is the process of verifying that a purchaser has the right to use their payment method by verifying their identity prior to approving a transaction.
Payment authentication protects businesses from the theft of card information, fraudulent accounts, and unauthorized charges. Instead of using just a single, simple verification method, modern payment authentication utilizes advanced systems to analyze transaction-related data in real time.
If the transaction appears as typical, the payment will be approved efficiently. If there are potential signs of risk, the system will ask for a higher degree of verification than would typically be requested. This enables the security level to increase only when necessary.
Why Businesses Cannot Overlook Payment Authentication
As the popularity of online payments increases, so does the number of attempts made by fraudsters to commit fraud against organizations. Businesses can suffer a variety of problems when payment authentication is weak.
- Fraudulent purchases lead to lost revenue.
- Businesses incur fees and penalties when customers charge back items.
- Businesses pay a higher fee to process a transaction.
- Businesses lose their customers’ confidence.
When customers make an online payment, they expect that their financial information will be secure. When companies use strong authentication methods, they demonstrate that they are committed to protecting their customers from fraud and that they value their security.
How Strong Authentication is Built
Modern payment systems rely on many layers of verification working together to create strong authentication. Four methods make up strong authentication.
Knowledge Based Verification
Knowledge-based verification is based on information that only the customer should know. Typically, this verification method includes the use of a password (PIN).
Possession-Based Verification
Possession-based verification is based on something the customer possesses. For example, a mobile device, which can receive a one-time code (OTC).
Biometric Verification
Biometric verification is based on the customer’s unique traits. Such as, fingerprints and facial recognition.
Behavioral Analysis
Behavioral analysis is the study of a user’s behavior over time using various methods, like, device history, purchasing habits, and location to identify any suspicious activity before it occurs.
Using multiple methods of authentication creates very strong protection against fraud without slowing down the transaction process.
Technology That Makes It Possible
The use of sophisticated methods to help verify payments occurs from behind the scenes. When a customer uses a debit or credit card to make a purchase, tokenization is used to substitute the actual card number with a secure digital reference. While payment data is transmitted from one system to another, encryption protocols protect it.
The use of risk-based models enables merchants to keep the customer’s checkout experience as seamless as possible while enhancing the security of their transactions. This multi-layered technology enables merchants to maintain a secure environment while providing a seamless checkout experience for their customers.
Balancing Security and Customer Experience
Companies have a dilemma, if they set up too much security, customers get frustrated and leave without making a purchase. If they set up too little, they do not have protection against fraud.
With smart payment authentication, you can define procedures based on the level of risk associated with each transaction. Most transactions are approved without delay, while suspicious transactions undergo additional scrutiny. Using this method will help keep revenue secure without creating too many obstacles.
Most older systems will not be able to find this balance, resulting in a loss of sales as well as a loss of security.
Why Gulf Management Systems Is the Best Choice for Payment Authentication
If you’re looking to provide the strongest level of protection to your customers while minimizing complexity in the process of processing transactions, then get started with GMS. We have a complete suite of payment processing solutions developed with the most reliable methods of ensuring secure payment authentication. Such solutions include secure payment gateways, virtual terminals, recurring billing solutions, credit card processing, and payment integrations.
These systems utilize secured networks for transmitting data, use tokenization to protect all sensitive cardholder data, and are compliant with the Payment Card Industry Data Security Standards (PCI-DSS) to protect all sensitive cardholder data.
The company also tracks transaction behavior to monitor for and identify fraud. Through early detection of suspicious transaction behaviors, they are able to provide fraud reduction solutions and reduce risk of chargebacks by providing real time updates to their merchant customers.
Using their wide range of payment solutions enables merchants to provide their customers with a smooth payment process and to continue providing better experiences for those same customers every time they complete a sale.
As merchants grow their business, the models used by Gulf Management Systems allow them to grow their payment processing systems while allowing for consistent levels of strong authentication with every payment transaction, allowing them the peace of mind to continue to ensure their customers consist of secure and reliable payments.
